Operations Management

INNOVATION AND BUSINESS GROWTH IN THE FASHION INDUSTRY: A CASE STUDY OF NSUKKA, ENUGU STATE

By
 
NKIRUKA STELLA NGENE
Learn to Live Business School, UK.
 
 
 
October, 2024
 
Correspondence: nkiruka.ngene@unn.edu.ng;
  +234703 862 7767

ABSTRACT

In a rapidly evolving global fashion landscape, local businesses should find strategies to overcome the significant challenges in adopting innovative practices essential for competitiveness and sustainable growth. This study explored the importance of innovation in driving business growth in Nsukka’s fashion industry, Enugu State, Nigeria. The study adopted a case study approach with a survey questionnaire as an instrument. The population for the study was 269 respondents, randomly drawn following the suggested sample from G*Power. The questionnaire used for the data collected was validated, and tested for reliability using Cronbach’s alpha. An overall reliability coefficient of 0.947 was obtained. Data analysis was based on percentages, mean, and ANOVA statistics. Findings showed that different types of fashion businesses operate in Nsukka, and recognize the value of social media, digital marketing, and e-commerce as innovations, while other innovative tools are underutilized or unknown. Barriers to innovation adoption include lack of funds and government support. Major strategies to enhance innovation adoption and drive fashion business growth were access to funds with low interest rates, partnerships, and access to different technologies and experts. This research contributes to a deeper understanding of how innovation can drive regional economic development in emerging fashion markets.

Keywords: Business growth, Fashion Industry, Innovation, Nsukka

INTRODUCTION

            Fashion is beyond the looks of an individual. Fashion is the art and practice of designing, creating, and wearing clothing, accessories, and footwear that reflect personal style, cultural influences, and current trends. According to Sumathi (2007), fashion is a prevailing style or custom adopted by a significant portion of society at any given time. It reflects not only clothing but also various aspects of life, such as behavior, accessories, and home decor, influenced by cultural, social, and economic factors. Fashion serves as a mode of self-expression, representing the individual’s personality and societal identity while continually evolving with changing trends. Maintaining and sustaining styles and trends in fashion requires an industrial approach; thus a fashion industry refers to the sector that encompasses the design, production, marketing, and retail of clothing, footwear, accessories, and related products. Čiarnienė and Vienažindienė (2014) explained that fashion and its industry is a key component of the broader social and cultural phenomenon called the “fashion system,” where the fashion system includes both the business and artistic aspects of fashion, as well as the processes of production and consumption. Aside from the fashion industry paying attention to the culture of the populace, there are challenges of supply chain complexities and sustainability issues, as well as digital transformations and innovations that are vital to succeeding in the industry.

            Innovation involves the creation or significant enhancement of products, services, processes, or business models, offering new value to organizations, industries, or consumers. Ionela-Andreea (2019) emphasizes that innovation is closely tied to design and creativity, as it involves developing, implementing, and communicating fresh ideas to achieve goals like reaching new customers, entering bigger markets, or gaining a competitive advantage. In the fashion industry, innovation spans various areas, such as technological advancements, sustainable materials, digital marketing, and improved customer experiences (Colombi & Casciani, 2021). It can be incremental, gradual improvements, or disruptive, reshaping industry standards (Ionela-Andreea, 2019). The fashion sector’s innovations are often fueled by digital transformation, including the rise of e-commerce, social media, and technologies like AI, virtual fitting rooms, and 3D printing. These innovations have transformed consumer shopping habits, brand marketing strategies, and the fashion supply chain. Fashion is no longer confined to physical stores or seasonal releases, as consumers access brands and trends online. However, a critical question remains: how many of these innovations are accessible to small and medium enterprises (SMEs), particularly within the fashion industry?

            Despite the global competition aims of industries, innovation adoption in the fashion industry has predominantly been embraced by large-scale enterprises. Zahra et al. (2021) noted that small and medium enterprises (SMEs) in the fashion sector tend to lag in adopting innovative practices. The literature emphasizes the benefits of innovation for SMEs, such as improved business performance through faster response times, increased transparency, real-time market analytics for product development, enhanced productivity, cost savings, streamlined monitoring, quicker product development cycles, and greater access to international markets (Mittal et al., 2018; Zahra et al., 2021). Okanazu (2018) found that the most common innovations among SMEs in Enugu State included digitizing products and making them accessible via mobile platforms. However, SMEs in fashion businesses like tailors, fabrics/accessories sellers, and boutiques face challenges unique to the industry. According to Zahra et al., (2021), these challenges include short product life cycles, unpredictable market demands, high trend uncertainty, and a volatile supply chain. Despite these hurdles, research consistently highlights the positive impact of innovation on expanding the fashion industry’s reach, enabling consumer engagement in novel ways, and fostering business growth, even on a global scale. Furthermore, Spescha and Woerter (2018) emphasize that innovation acts as a catalyst for business growth.

            Business growth refers to a company’s expansion and increased profitability, marked by higher revenue, market share, and operational scale. In the fashion industry, growth is achieved through market expansion, product diversification, innovation, and improved operational efficiency. This growth can be organic, involving geographical expansion, increased product offerings, or inorganic, through mergers and acquisitions (Hubbard & Hubbard, 2013). Additionally, fashion industry growth involves enhancing brand equity, fostering customer loyalty, and adopting scalable, sustainable business models for long-term success (Yang & Jang, 2020). Key growth metrics include financial performance, expanding the customer base, and strengthening market position relative to competitors (Morgan et al., 2009). In Nigeria, evidence suggests that the fashion industry has significant growth potential.

            Fashion (2024) reports that Nigeria’s fashion market is booming, with projected revenues expected to reach US$1.194 billion by 2024, showing consistent annual growth of around 17% over the past decade. This impressive growth has been largely driven by small and medium enterprises (SMEs) that play a crucial role in creating jobs and fueling economic growth (Zahra et al., 2021). Empowering SMEs with the necessary technologies can significantly enhance their development and competitiveness in the marketplace. Innovation is key to unlocking new possibilities and improving business processes, with business growth often reflecting the success of these innovations in expanding and scaling a brand. Given this potential, a critical question arises: What innovations are SMEs in fashion businesses within Nsukka adopted or willing to adopt, and what outcomes can be expected from innovating in the face of current challenges?

            Nsukka, Enugu State, is a culturally rich and economically vibrant region, home to numerous small-scale fashion entrepreneurs. While the local fashion industry draws heavily on traditional aesthetics and craftsmanship, it faces challenges in adopting innovative practices that could scale operations and enhance business growth. Many fashion businesses in Nsukka operate with limited resources, often relying on outdated production techniques and traditional marketing methods. These limitations impede their ability to compete effectively in a globalized market that increasingly demands innovation. As a result, fashion businesses in Nsukka struggle to reach their full potential, missing out on opportunities for growth, profitability, and wider market reach.

            This study is particularly vital given the rising importance of innovation in the global fashion industry. Technological advancements such as 3D printing, artificial intelligence, and digital platforms have revolutionized how fashion products are designed, produced, and marketed. Furthermore, there is a growing demand for sustainability, with consumers favoring brands that incorporate ethical sourcing, environmentally friendly materials, and circular economy practices. For Nsukka’s fashion sector to thrive in this context, there is a pressing need to explore how innovation can be leveraged to overcome the barriers local businesses face and drive sustainable growth. By focusing on Nsukka, this research aims to uncover the unique challenges and opportunities for innovation in the town’s fashion industry, providing insights that can benefit other emerging fashion markets facing similar conditions.

STATEMENT OF THE PROBLEM

            Like many other emerging markets, the fashion industry in Nsukka, Enugu State faces significant challenges in achieving sustainable business growth. Many fashion businesses, from small-scale designers to retail outlets, struggle to remain competitive in an increasingly globalized market. A lack of innovation, limited access to cutting-edge technology, inadequate business management skills, and an over-reliance on traditional methods of production and sales have impeded growth and reduced profitability for these businesses.

            In Nsukka, most fashion enterprises operate with limited resources and often lack the knowledge or tools to adopt innovative practices, such as digital marketing, advanced production techniques, or sustainable sourcing. As a result, they are unable to effectively compete with larger brands that have embraced innovation to improve operational efficiency, reduce costs, and meet evolving consumer demands. Furthermore, the fashion sector in this region has not fully explored the potential of technological advancements like e-commerce, artificial intelligence, or sustainable design practices to create value and drive business growth.

            This study is driven by the need to address these gaps and explore how innovation can catalyze business growth in the fashion industry in Nsukka. By examining the barriers to innovation adoption and understanding the specific challenges faced by fashion businesses in this area, this research aims to identify strategic solutions that could foster innovation, enhance competitiveness, and ultimately stimulate business growth in the local fashion sector.

PURPOSE OF THE STUDY

            This study explores the link between innovation and business growth in the fashion industry among SMEs in Nsukka, Enugu State. Specifically, the study determines the:

  1. the current state of innovation adoption among fashion businesses in Nsukka.
  2. Barriers to innovation among fashion businesses in Nsukka.
  3. Strategies for enhancing innovation and business growth among fashion businesses in Nsukka.
  4. Impact of innovation on business growth among fashion businesses in Nsukka.  

RESEARCH QUESTIONS

The following research questions were answered in this study:

  1. What is the current state of innovation adoption among fashion businesses in Nsukka?
  2. What are the barriers to innovation among fashion businesses in Nsukka?
  3. What are the strategies for enhancing innovation and business growth among fashion businesses in Nsukka?
  4. How does innovation impact business growth among Nsukka fashion businesses?

HYPOTHESES

The following hypotheses were tested at a 0.05 level of significance:

  1. There is no significant difference in the current state of innovation adoption among fashion businesses in Nsukka.
  2. There is no significant difference in the barriers to innovation among fashion businesses in Nsukka.
  3. There is no significant difference in the strategies for enhancing innovation and business growth among fashion businesses in Nsukka.
  4. The impact of innovation on business growth does not differ significantly among fashion businesses in Nsukka.  

METHODOLOGY

RESEARCH DESIGN

            This study adopted a case study research design based on survey responses of fashion business owners and workers within Nsukka Local Government Area, Enugu State. A case study design allows for a comprehensive and detailed examination of issues of interest (Priya, 2021). It enables the researcher to explore the unique characteristics, challenges, and opportunities specific to fashion businesses within Nsukka. This approach is ideal for investigating phenomena, such as innovation adoption, in real-world settings. Given the focus on Nsukka, the case study design provides the flexibility to analyze the local dynamics, industry-specific factors, and individual business strategies, which might not be fully captured through broader research methods.

            Likewise, using a survey questionnaire allows for the collection of quantifiable data from a larger sample of fashion businesses. This method ensures that responses are standardized, making it easier to compare across different groups or subcategories, such as tailoring, fabric/accessories sellers, and boutiques. The survey enables the collection of specific information about the state of innovation, technological adoption, and business practices, providing a clear picture of how widely innovation is embraced among fashion businesses in Nsukka. Moreover, the survey can capture data on both perceptions and actual business practices, offering insights into the barriers, and expected impact of innovation.

AREA OF THE STUDY

            Nsukka, a suburban city in Southeastern Enugu State, Nigeria, was chosen for this study due to its growing population, urbanization, and expanding commercial activities. These factors have fueled a thriving fashion business sector, with numerous tailoring shops, fabric sellers, and boutiques emerging in response to rising demand. As the sub-urban grows, the fashion industry flourishes alongside it, becoming a vital part of the local economy. Nsukka serves as a reflection of the broader urbanization trends across Nigeria, where fashion entrepreneurs are capitalizing on the city’s development to cater to its increasingly fashion-conscious population.

POPULATION AND SAMPLING METHOD

            There are three quarters in the Nsukka metropolis namely Onuiyi, Odenigbo, and Ogige, with a population of about 450,000 (Nsukka Local Government Area, Nigeria, n.d.). The population for this study was determined using G*Power, a widely recognized statistical tool designed to calculate the appropriate sample size needed for various types of statistical analyses. G*Power was specifically utilized to compute the “A priori sample size required for conducting an ANOVA (Analysis of Variance) test with a fixed effect omnibus approach and one-way test design” (Faul et al., 2007). This type of ANOVA is used to assess whether there are any statistically significant differences between the means of multiple groups. After running the calculations through G*Power, the tool generated a sample size of 252, which is deemed appropriate to ensure sufficient statistical power and reliability for the study’s analysis. This method ensures that the sample size is neither too small (which could lead to inaccurate results) nor unnecessarily large, maintaining efficiency while maximizing the study’s ability to detect significant differences.

            However, to ensure that an adequate population sample was realized, 10% of 252 was added to account for errors in completing the instrument, not retrieving copies, etc. Thus, a total population of 277 was sampled for the study. A total of 269 valid questionnaires were duly completed, comprising 121 Tailors, 53 fabrics/accessories dealers, 85 boutique owners/staff, and 10 others including laundry service providers, shoemakers, etc. The details of the population are shown in Table 1, Figures 1 and 2.

INSTRUMENT FOR DATA COLLECTION

            The instrument for the data collection was a structured questionnaire developed from the literature review. The instrument is titled Innovation for Business Growth Questionnaire (i4BuG). It began with an opening statement assuring respondents of the voluntary nature of their responses, as well as the anonymity and confidentiality promises. It has two sections, A and B. Section A ascertains demographic information of the respondents such as the type of fashion business, how long the business has been, and the number of employees. Section B has 40 items spread over 4 four parts, denoted I – IV, according to the specific purposes. Part I has 11 items to ascertain the state of current innovation adoption among fashion businesses in Nsukka. Respondents were asked to select from the list, the innovation they have used in business using two response options of Yes (2) or No (1). Part II has 10 items that ascertain barriers to innovation in fashion businesses, Part III has 8 items that ascertain the strategies for enhancing innovation and growth in fashion businesses, while Part IV consists of 11 items that elicit the impact of innovation on the growth of fashion businesses. Parts II-IV elicited responses using a 5-point Likert scale of SA (Strongly Agree) = 5; A (Agree) = 4; N (Neutral) = 3; D (Disagree) = 2; SD (Strong Disagree) = 1. Thus, respondents were asked to indicate the extent to which they agreed with the statements.

            The instrument was face-validated by three experts from two Departments at the University of Nigeria, Nsukka. The experts’ views and corrections were integrated into the final copy of the instrument. The reliability of the instrument was tested using Cronbach’s alpha. The reliability test showed an overall reliability coefficient of 0.947, which is judged acceptable for the study. Data collection was through direct administration and retrieval using 12 research assistants. The research assistants were briefed on the motive of the data collection, the voluntary nature, anonymity and confidential statements, before being sent across the three parts of the suburban city. Data collection lasted for one week.

METHOD OF DATA ANALYSIS

            The collected data were analyzed using simple percentages for demographic information, as well as mean, standard deviation, and one-way ANOVA to compare the responses of different groups. Simple percentages were used to illustrate the demographic characteristics of the respondents and the state of innovation adoption thus far. The mean and standard deviation were applied to assess the level of agreement expressed by respondents on the questionnaire items. Using a 5-point rating scale, a mean score of 3.50 was considered the threshold, with scores of 3.50 or higher indicating “Agreed,” while scores below 3.50 signified “Disagreed.” For research question 1, the percentage of “Yes” below 50% is termed Poor, above 50% Adequate, while exactly 50% is termed average. Additionally, ANOVA was employed to compare the responses from three different groups, and the significant differences between these groups were tested at a 0.05 significance level.

RESULTS

DEMOGRAPHIC INFORMATION

Table 1 shows the types of fashion businesses prevalent in Nsukka. Tailoring had the highest frequency among the fashion businesses while boutique owners/staff came second. Others who were found relevant in the fashion businesses include shoemakers, laundry shops, hairdressers, and barbers.

Table 1

Sampled Fashion Business Types

S/NFashion Business TypeFrequencyPercentage
1.Tailoring12145.0
2.Fabric/Accessories Sales5319.7
3.Boutique8531.6
4.Others103.7
 Total269100.0

Figures 1 and 2 reveal the age of the fashion businesses and their respective number of employees or workers. Most of the businesses were still incubating as only 7% (18) had operated for more than 6 years. On the other hand, no fashion business has more than 10 employees, indicating that the fashion business in Nsukka could mainly be classified as small and medium scale enterprises.

Figure 1

 Age of Fashion Businesses Sampled

Figure 2

Number of Employees in the Fashion Businesses Sampled

RESEARCH QUESTIONS AND HYPOTHESES

RQ1– What is the current state of innovation adoption among fashion businesses in Nsukka?

Table 2

Percentage of Innovation Adoption Status in Fashion Businesses

S/NInnovations in Fashion BusinessesYes%No%Status
1.Live stream of designs and processes238.624691.4Poor
2Augmented reality00269100Poor
3Virtual Fashion62.226397.8Poor
4Artificial Intelligence00269100Poor
5.Online Sales /Marketplace (e-commerce)259.324490.7Poor
86Virtual influencers238.624691.4Poor
7Real-time tracking/inventory management72.626297.4Poor
8Use of sustainable materials103.725996.3Poor
93D printing186.725193.3Poor
10.Social media marketing (Instagram, Facebook, WhatsApp, Twitter)3613.423386.6Poor
11.Digital Marketing2910.824089.2Poor

Results in Table 2 reveal that Innovation adoption among fashion businesses in Nsukka is notably low. Most modern technologies, such as augmented reality, virtual fashion, and artificial intelligence, are barely used, with 0% to 2.2% of businesses adopting these innovations. Even more commonly adopted innovations, such as e-commerce platforms (9.3%) and digital marketing (10.8%), still show relatively low penetration. The highest adoption rate is for social media marketing (13.4%), suggesting that while businesses recognize the value of social media, other innovative tools are being underutilized or are not even known at all.

Ho1 – There is no significant difference in the current state of innovation adoption among fashion businesses in Nsukka.

Table 3

Descriptive and ANOVA Results of Current State of Innovation Adoption among Fashion Businesses

S/N Business TypeDescriptiveANOVA
 No.MeanSD dfFSig.Remark
1Tailoring1211.72.18Between Groups34.438.005S
2Fabrics/Accessories531.76.19Within Groups265   
3Boutique851.80.15Total268   
4Others101.84.20     
5Total2691.76.18     

Key: No. = Frequency/Number of Respondents; SD = Standard Deviation; df = degree of freedom; F = critical value, Sig.= Probability level of significance; NS = Not Significant; S = Significant

Data in Table 3 shows the ANOVA results with a significant difference in innovation adoption across different business types (p = 0.005). This means that some business categories, like Tailoring, Fabrics/Accessories, and Boutiques, adopt innovations at different levels. However, the results also indicate that Boutiques (Mean = 1.80) have slightly higher innovation adoption compared to Tailoring (Mean = 1.72), Fabrics/Accessories (Mean = 1.76), and Other businesses (Mean = 1.84). This suggests that boutiques may be slightly more innovative than other types of fashion businesses in Nsukka. Based on the result in Table 3, hypothesis one was not accepted.

RQ2 – What are the barriers to innovation among fashion businesses in Nsukka?

Table 4

Barriers to Innovation in Fashion Businesses

S/NBarriers to Innovation in Fashion BusinessesMeanSDRemarks
12.Lack of funding3.581.13Agreed
13.Limited knowledge3.381.28Disagreed
14.Fear of failure3.221.33Disagreed
15.Fear of technology3.77.96Agreed
16.Lack of skilled personnel3.571.06Agreed
17.Poor government support3.621.11Agreed
18.Lack of training opportunities using innovative fashion tools3.591.25Agreed
19.Limited access to the technology3.82.97Agreed
20.Lack of networking opportunities3.831.0Agreed
21.Poor access to quality information3.771.0Agreed
 Cluster_Barriers3.61.77Agreed

Table 4 shows the barriers to innovation in fashion businesses among which the top barriers include: lack of funding (Mean = 3.58), fear of technology (3.77), lack of skilled personnel (3.57), poor government support (3.62), and limited access to technology (3.82). These barriers highlight the challenges that fashion businesses in Nsukka face in adopting innovations. The cluster mean (3.61) further shows that most respondents agree that these factors significantly hinder innovation.

HO2 – There is no significant difference in the barriers to innovation among fashion businesses in Nsukka.

Table 5

Descriptive and ANOVA Results of the Barriers to Innovation in Fashion Businesses

S/N Business TypeDescriptiveANOVA
 No.MeanSD dfFSig.Remark
1Tailoring1213.52.83Between Groups31.577.195NS
2Fabrics/Accessories533.75.46Within Groups265   
3Boutique853.69.80Total268   
4Others103.42.94     
5Total2693.61.77     

Key: No. = Frequency/Number of Respondents; SD = Standard Deviation; df = degree of freedom; F = critical value, Sig.= Probability level of significance; NS = Not Significant; S = Significant

The descriptive results in Table 5 show that the business type notwithstanding, Tailoring (Mean = 3.52), Fabrics/Accessories sales (3.75), and Boutiques (3.69), the perceived barriers are comparable. This suggests that barriers like funding, technology access, and skilled personnel shortages are universally problematic. Also in Table 5, the ANOVA results revealed that there was no statistically significant difference in mean barriers across different business types (p = 0.195), indicating that all fashion businesses, regardless of type, face similar obstacles. Hence, the null hypothesis was accepted.

RQ3 – What are the strategies for enhancing innovation and business growth among fashion businesses in Nsukka?

Table 6

Strategies for Enhancing Innovation and Growth in Fashion Businesses

S/NStrategies for Enhancing Innovation and Growth in Fashion BusinessesMeanSDRemarks
22.Access to funding, with zero or single-digit interests3.981.06Agreed
23.Training programmes on available innovative fashion according to the level of recipients3.511.16Agreed
24.Access to technology such as inventory management software, Digital design tools, Customer relationship management software, etc.3.731.10Agreed
25.Partnerships with universities, fashion institutes, or industry experts 3.751.08Agreed
26.Provide a guide for skills in e-commerce platforms, social media marketing tools, etc.3.351.10Disagreed
27.Providing short courses and workshops on fashion design and business management3.451.33Disagreed
28.Effective and efficient networking opportunities3.951.15Agreed
29.An organized provision to shared resources and innovative expertise. 3.811.21Agreed
 Cluster_Strategies3.74.71Agreed

Table 6 shows that six of the eight strategies were agreed to be helpful in adopting innovation across the fashion businesses in Nsukka. In order of priority, the six strategies are access to funding with zero or single-digit interest rates (Mean = 3.98), effective networking opportunities (3.95), shared resources and innovative expertise (3.81), partnerships with universities, fashion institutes, or industry experts (3.75), and access to different technology (3.73). These strategies suggest that businesses recognize the importance of external resources and support, such as funding and technology, as critical to boosting innovation.

            Data in Table 6 also show that some strategies were less supported: providing guides for e-commerce platforms and social media marketing tools (Mean = 3.35) and short courses and workshops on fashion design and business management (3.45). These may indicate that businesses either already have access to some of these tools or do not see these as a high priority for innovation.

Ho3 – There is no significant difference in the strategies for enhancing innovation and business growth among fashion businesses in Nsukka.

Table 7

 Descriptive and ANOVA Results on Strategies for Enhancing Innovation Adoption in Fashion Businesses

S/N Business TypeDescriptiveANOVA
 No.MeanSD dfFSig.Remark
1Tailoring1213.80.68Between Groups32.927.034S
2Fabrics/Accessories533.85.70Within Groups265   
3Boutique853.63.72Total268   
4Others103.23.66     
5Total2693.74.71     

Key: No. = Frequency/Number of Respondents; SD = Standard Deviation; df = degree of freedom; F = critical value, Sig.= Probability level of significance; NS = Not Significant; S = Significant

Data in Table 7 reveal that Tailoring (Mean = 3.80) and Fabrics/Accessories sales (3.85) businesses have higher scores for strategy adoption, while Boutiques (3.63) and Other businesses (3.23) have lower scores. This indicates that tailoring and fabrics/accessories businesses may be more proactive in implementing growth strategies compared to other business types. The ANOVA results show a significant difference (p = 0.034) in strategy adoption among different business types. This suggests that some business types may be more inclined to adopt certain strategies. Based on the variant acceptance of the strategies across the fashion business types, the null hypothesis was not accepted.

RQ4 – How does innovation impact business growth among Nsukka fashion businesses?

Table 8

Impact of Innovation on the Growth of Fashion Businesses

S/NImpact of Innovation on the Growth of Fashion BusinessesMeanSDRemarks
30.Improves customer satisfaction3.81.95Agreed
31.Helps in attracting new customers3.611.16Agreed
32.Contributes to increased revenue in business3.87.83Agreed
33.Helps businesses to expand into new markets3.641.23Agreed
34.Improves speed and efficiency in product development3.721.03Agreed
35.Reduces the operational cost of fashion businesses3.381.32Disagreed
36.Helps business to maintain a competitive edge3.451.29Disagreed
37.Easy adaptation to changing fashion trends and consumer preferences3.621.39Agreed
38.Improves business-to-customer interaction3.291.37Disagreed
39.Helps in building strong customer relationships and loyalty2.941.42Disagreed
40.Improves the overall shopping experience for your customers3.501.19Agreed
 Cluster_Impact3.84.87Agreed

Table 8 shows that seven of the items were agreed to be impacts of adopting innovation across the fashion businesses in Nsukka. The respondents agreed that adopting innovation would impact fashion business growth by improving customer satisfaction (Mean = 3.81), attracting new customers (3.61), contributing to increased revenue (3.87), as well as improving speed and efficiency in product development (3.72) among others. These findings suggest that there is a clear idea of what is expected from innovation among fashion businesses in Nsukka.

            Data in Table 8 also show that some impacts were less supported. For instance, respondents disagreed that innovation reduces the operational cost of fashion businesses (Mean = 3.38), indicating that they have an initial cost of acquisition and perhaps maintenance in their thoughts. Results also show a disagreement with the innovation’s help in building strong customer relationships and loyalty (Mean = 2.94), as the least accepted. These may indicate that the importance of innovation adoption is solely to pursue a personally conceived goal, hence the goal may not be generalized.

Ho4 – The impact of innovation on business growth does not differ significantly among fashion businesses in Nsukka.  

Table 9

Descriptive and ANOVA Results on Impacts of Innovation Adoption in Fashion Businesses

S/N Business TypeDescriptiveANOVA
 No.MeanSD dfFSig.Remark
1Tailoring1213.40.93Between Groups31.276.283NS
2Fabrics/Accessories533.67.76Within Groups265   
3Boutique853.46.84Total268   
4Others103.62.98     
5Total2693.48.87     

Key: No. = Frequency/Number of Respondents; SD = Standard Deviation; df = degree of freedom; F = critical value, Sig.= Probability level of significance; NS = Not Significant; S = Significant

The descriptive results in Table 9 show that the impact of innovation varies across the business types: Tailoring (Mean = 3.40), Fabrics/Accessories sales (3.67), and Boutiques (3.46), Others (3.62), while the overall was below 3.50, further validating the ungeneralizable acceptance of what innovation would do for the fashion businesses. Also in Table 9, the ANOVA results revealed that there was a statistically significant difference in the mean impact of innovation across different fashion business types (p = 0.283), indicating that all fashion businesses do not attach the same level of importance to their pursuit of innovation. Hence, the null hypothesis was accepted.

FINDINGS OF THE STUDY

The following findings emerged from the study:

  1. There are different types of fashion businesses in Nsukka, such as tailoring, fabric/accessories sales, boutiques, shoemaking, saloon/barbing, and laundry services.
  2. Fashion businesses recognize the value of social media, digital marketing, and e-commerce as innovations, but many other innovative tools are underutilized or not even known.
  3. Some barriers hinder fashion businesses in Nsukka from adopting innovations, including lack of funds, and lack of government support among others.
  4. Fashion businesses agreed with strategies to enhance innovation adoption such as access to funds with low interest rates, partnerships, and access to different technologies and experts, even if they will be shared among several businesses.
  5. The respondents agreed that adopting innovation would impact fashion business growth by improving customer satisfaction, revenue, and production time, showing a clear idea of what is expected from innovation among fashion businesses in Nsukka.
  6. There is a significant difference in the current state of innovation adoption among fashion businesses in Nsukka.
  7. There is no significant difference in the barriers to innovation among fashion businesses in Nsukka.
  8. Fashion businesses in Nsukka have significantly different strategies for enhancing innovation and business growth.
  9. The impact of innovation on business growth does not differ significantly among fashion businesses in Nsukka.

DISCUSSION

Different Types of Fashion Businesses

            The findings from this study showed that there are different types of fashion businesses in Nsukka, such as tailoring, fabric/accessories sales, boutiques, shoemaking, saloon/barbing, and laundry services. The variety is not surprising given the general landscape of fashion businesses. A broader search across sources, such as websites and studies, confirms the prevalence of these businesses in Nsukka and the surrounding area. Spacey (2017) offers further validation by identifying 22 different types of fashion businesses that are popular globally, including bespoke and made-to-measure tailoring, footwear manufacturing, jewelry design, and costume-making. This comparison with Spacey’s categorization demonstrates that the fashion businesses in Nsukka are part of a broader spectrum of industry types that are not only thriving globally but are also locally adapted.

            This finding is critical because it underscores the versatility of the fashion industry. Fashion is not limited to clothing design and production alone but includes a wide range of connected services and products that add value to the sector. The local adaptation of global fashion business types indicates both opportunity and diversity within the sector and proves that those in Nsukka are tapping into different areas of the fashion industry, contributing to economic growth and creating jobs. The variety of businesses also points to the different skill sets within the local fashion community, from artisanship in tailoring and shoemaking to the entrepreneurial skills required to manage boutiques and salons. This diversity further demonstrates the potential for growth in various niches within the fashion business. These businesses not only meet local demand but also offer avenues for innovation and economic contribution, reinforcing the industry’s importance in both local and global contexts.

Innovation adoption status across fashion businesses

            Fashion businesses within Nsukka adopt varying levels of innovation, with a focus on digital tools like social media, digital marketing, and e-commerce. These innovations are recognized and utilized by many local businesses, particularly boutiques. However, more advanced technologies such as augmented reality (AR) and artificial intelligence (AI) remain underutilized or even unknown in many cases. This uneven adoption is a significant point, indicating a gap between potential innovation and its implementation within the local industry.

            These findings align with the findings of Todeschini et al. (2017), who noted that while the fashion industry is generally innovation-driven, many businesses, especially smaller ones, are not fully aware of emerging trends like sustainability or cutting-edge technology applications. Similarly, Duml & Perlacia (2016) found that technological advances, including mobile technology and social media, have reshaped how fashion businesses interact with suppliers and customers. This shift has facilitated the growth of e-commerce, allowing fashion businesses to expand their reach and improve accessibility. The mention of Slyce (2015) further reinforces the idea that the internet has catalyzed new forms of commerce, notably e-commerce. This has opened new opportunities for fashion businesses in Nsukka to reach a broader market through online platforms, even though the full potential of digital innovation is not yet fully tapped. Lastly, while some fashion businesses in Nsukka are adapting well to basic digital tools, there is significant room for growth in the adoption of advanced innovations like AR and AI. The differences in innovation adoption between sectors, such as boutiques and tailoring, illustrate the varying degrees of digital transformation within the local fashion industry, a trend that may be alleviated if barriers are properly examined.

Barriers to innovation adoption in fashion businesses

            The finding on the barriers that hinder innovation adoption among fashion businesses in Nsukka, highlights challenges such as lack of funds and government support. These barriers are common across different business types, suggesting that any strategy to improve innovation adoption should target all sectors within the fashion industry equally. The issues faced by fashion businesses in Nsukka mirror those in many developing economies and among small and medium-sized enterprises (SMEs), as identified by Sari & Asad (2018) and Zahra et al. (2021).

            According to Zahra et al. (2021), many SMEs struggle to adopt innovation due to various constraints, particularly in developing economies. Sari & Asad (2018) identified key barriers, including human resource barriers – a shortage of skilled staff and a lack of necessary expertise limiting the ability to integrate innovations, operational resource barriers – the scarcity of raw materials and the difficulty in sourcing high-quality inputs further complicate innovation efforts; financial barrier – the high cost of innovation, lack of funding, and poor financial management are significant obstacles; imitation over innovation – where some businesses focus on copying competitors rather than investing in original innovation, limiting their potential for growth and differentiation.

            These barriers are universal to many SMEs, particularly in developing contexts, where financial and resource limitations are more pronounced. In Nsukka, the lack of both financial resources and institutional support further compounds the challenge, making it difficult for fashion businesses to embrace innovative practices, regardless of their type. Overcoming these barriers requires comprehensive support mechanisms, among other strategies for enhancing innovation adoption.

Strategies to enhance innovation adoption in fashion businesses

            The fashion businesses in Nsukka recognize several key strategies to enhance innovation adoption. These include access to low-interest funds, partnerships, and shared access to advanced technologies and expert resources. Despite agreeing on these strategies, the choice of how to implement them varies significantly across different fashion businesses in the region. Literature has studies corroborating the existence of different strategies.

            Some fashion businesses may prioritize access to funding, while others might focus more on partnerships or technological integration. Regardless of these preferences, the core strategies – improving funding opportunities, facilitating access to technology, and providing training for skilled personnel – are widely seen as essential to fostering innovation and business growth. Sari & Asad (2018) and Zahra et al. (2021) have suggested similar strategies for overcoming barriers to innovation, particularly for small and medium-sized enterprises (SMEs) in developing economies. Wijaya et al. (2023) further emphasized the importance of collaboration between the local fashion industry and technology developers, such as software and website application creators. These partnerships can help fashion businesses implement user-friendly technologies, improve customer engagement, and make better use of marketing research. By doing so, businesses can enhance customer satisfaction, streamline operations, and increase their competitive advantage. Collaboration with tech experts and proper use of digital tools, as suggested by Wijaya et al. (2023), can significantly elevate the local industry’s ability to innovate and grow.

Impact of innovation adoption on fashion businesses

            The findings of the study indicate that adopting innovation within fashion businesses in Nsukka positively influences business growth by enhancing customer satisfaction, increasing revenue, and reducing production time. This suggests that local businesses should have a clear understanding of what they expect from innovation: improved efficiency and customer experience. Moreover, the study shows that the impact of innovation on business growth is relatively uniform across different types of fashion businesses in Nsukka, highlighting a broad consensus on the benefits of innovation adoption.

            The literature consistently supports the view that innovation is critical for business growth in the fashion industry. Ogbari et al. (n.d.) emphasize that innovation can drive market expansion, allowing businesses to reach new customer segments, whether by broadening existing markets or penetrating new geographic, demographic, or psychological territories. However, despite the evident creativity in Nigeria’s local fashion industry, small-scale businesses often struggle to fully capitalize on global market opportunities. This challenge stems from their limited ability to promote their skills and navigate the barriers related to scaling production and distribution. Other studies, such as Wang (2019), confirm that innovation helps businesses retain market share and maintain their customer base, while noting that innovation improves production speed, contributing to overall operational efficiency. These impacts are crucial for the growth and sustainability of fashion businesses in Nsukka, as they align with the global understanding of innovation’s role in the fashion industry.

CONCLUSION

            The adoption of innovation is crucial for the growth of fashion businesses in Nsukka, improving customer satisfaction, revenue, and production efficiency. Despite the recognition of basic digital tools like social media and e-commerce, advanced technologies such as augmented reality and artificial intelligence remain underutilized. Barriers such as lack of funds, government support, and skilled labor hinder innovation adoption, which is a common challenge faced by SMEs in developing economies. Collaborative strategies, including partnerships, shared technologies, and increased funding, are essential for overcoming these obstacles and fostering innovation. Ultimately, innovation holds the potential to expand market reach, improve production processes, and ensure the long-term sustainability of fashion businesses in Nsukka; more support is needed to maximize these benefits.

RECOMMENDATIONS

Based on the findings, the following recommendations would suffice:

  1. Government agencies, financial institutions, and private investors should provide low-interest loans and grants to support innovation adoption in fashion businesses, especially for small and medium-sized enterprises (SMEs) in Nsukka.
  2. Local business associations and government bodies should offer training programs to familiarize fashion entrepreneurs with advanced technologies like augmented reality (AR), artificial intelligence (AI), and e-commerce platforms to enhance their operations.
  3. Fashion businesses in Nsukka should form partnerships with technology experts, software developers, and other industry stakeholders to share resources and implement innovative tools more effectively.
  4. Fashion businesses should leverage digital marketing and trade platforms to amplify their reach, enhance visibility, and tap into global markets, thereby addressing challenges in publicity and market access.

SUGGESTION FOR FURTHER STUDIES

The following are suggested for further studies:

  1. Impact of integrating advanced technologies on efficiency and customer engagement among fashion businesses in Nsukka.
  2. Comparative analysis of innovation adoption barriers among fashion businesses across various regions in Nigeria.
  3. Exploring the effectiveness of partnerships between fashion businesses and technology developers in business growth.

A longitudinal study on the impact of innovation adoption on business growth, market expansion, and customer satisfaction among fashion businesses in Nsukka

INNOVATION AND BUSINESS GROWTH IN THE FASHION INDUSTRY: A CASE STUDY OF NSUKKA, ENUGU STATE Read More »

PERFORMANCE APPRAISAL SYSTEMS INFLUENCE ON TEACHERS’ DEVELOPMENT IN PRIMARY SCHOOLS IN ENUGU NORTH LGA

By
 
CHINYERE EUNICE EKPERE
Chinyereogar315@gmail.com
+2348167457525
 
MASTER OF BUSINESS ADMINISTRATION (MBA)
LEARN TO LIVE BUSINESS SCHOOL UK
 
 
OCTOBER, 2024

ABSTRACT

The study aimed to examine the influence of performance appraisal systems on teachers’ development in primary schools in the Enugu North Local Government Area; to this end three purposes and corresponding research questions and null hypothesis. The study adopted a descriptive survey design and the instrument used to obtain information was a structured questionnaire and null hypotheses. The data collected were analyzed using SPSS to determine the mean, Standard Deviation, and T-test for the study. The population of the study comprised 481 primary school teachers in Enugu North LGA. Out of the population, the researcher sampled 202 primary school teachers. Taro Yamane’s formula was used to determine sample size. The data was collected and Cronbach Alpha reliability estimate was used to ascertain its internal consistency and the coefficient of 0.96 was obtained. Based on the presentation and interpretation of the data analyzed, the findings of this study revealed that the top-down appraisal, 360-degree feedback appraisal, and Objective-based evaluation appraisal have a positive influence on teachers’ development in primary schools in Enugu North Local Government Area. This research recommends that (i) teachers should be encouraged to open communication channels for feedback on performance to ensure teachers feel supported and valued in their development.

Keywords: Performance Appraisal Systems, Teachers’ Development, Objective Based Evaluation, 360 Degree Feedback

INTRODUCTION

Background to the Study

The national policy on education (2014) stated that “no education system can rise above the quality of its teachers”. The policy document has always attempted to positively influence the qualities and characters of pre-service and in-service teachers, at all levels of the Nigerian education system. In this way, there is the optimism to produce highly motivated, conscientious, and efficient classroom teachers, who will be encouraged to further the spirit of inquiry and creativity. The policy document also seeks to provide intellectual and professional backgrounds that are adequate to enhance total commitment to the teaching profession. However, the physical, social, and psychological conditions of teachers are replete with general decay, infesting the entire educational system in the country, due to obvious years of neglect of staff personnel management in public schools about staff: recruitment, welfare, appraisal, development/in-service training and discipline practices. Teaching activities are ultimately tied to effecting desired changes in the behavior of the learners. For real teaching to take place, there must be an improvement in the condition of service of teaching staff in our schools (Okeke, 2016).

Performance appraisal presents a reasonable mechanism or methodology to determine personal employee involvement towards organizational accomplishment of objectives and accomplishment, claim Khan, Waqas, and Muneer (2017). It is a challenging managerial function that calls for extra maturity, fairness, and objectivity when evaluating each employee’s performance on the job based on clear job-related criteria. Performance evaluation is increasingly becoming an integral component of a more comprehensive strategy to bring together operations related to human resources and business policies (Zayum, 2017). Performance evaluation can be seen as a general term covering a variety of activities through which organizations are looking to evaluate team members while improving their expertise, strengthening how they perform, and distributing rewards.

Employee development refers to the process through which organizations support and enhance the skills, knowledge, abilities, and behaviors of their employees. It involves providing employees with opportunities for growth, learning, and advancement, both personally and professionally. Employee development initiatives aim to increase employee competence, engagement, and satisfaction, ultimately benefiting both the individual and the organization (Carol and Florah, 2019).

Top-down performance appraisal systems are commonly used in organizations to evaluate employee performance. These systems involve the assessment of employees by their supervisors or managers. Top-down appraisal involves a high-level analysis of economic indicators, market influences, and industry performance to understand the broader context surrounding an asset’s value. This approach then delves deeper into specific factors such as the asset’s location, condition, and potential risks to arrive at a final valuation. By following this top-down approach, appraisers can gain a comprehensive understanding of the asset’s worth based on both macroeconomic trends and micro-level details (DeNisi and Murphy, 2017). 360-degree feedback appraisal is a performance evaluation method that gathers feedback from multiple sources, including supervisors, peers, subordinates, and even external stakeholders, providing a well-rounded view of an individual’s strengths and areas for development. This comprehensive feedback helps employees gain insights into their performance from different perspectives, aiding personal and professional growth (Groysberg and Polzer, 2014).

Objective-based evaluation appraisal is a performance review method with focus on specific, measurable goals set at the beginning of a performance period. This approach emphasizes quantifiable achievements and outcomes, making it easier to assess an individual’s performance against predetermined objectives. By clearly defining expectations and metrics, employees have a precise understanding of what is expected of them, facilitating a more accurate and fair evaluation process. Objective-based evaluation appraisal has a profound impact on teacher development. It fosters a culture of continuous learning and self-improvement. By setting clear benchmarks, it enables teachers to track their progress and take proactive steps toward growth (Evans and Mitchell, 2015).

Poor employee performance may be related to a flawed system for evaluating employees’ work (Adler, Campion, Colquitt, Grubb, Murphy, Rob, Elaine, and Pulakos, 2016). The current literature has a lot of investigations. To promote both individual development and organizational success in the public sector, the Nigerian government has worked to develop a systematic appraisal process since the country’s independence in the 1960s. The poor performance continues despite this effort. As a result, the public primary schools in Nigeria are often thought to be ineffectual and inefficient. Therefore, according to Lawal (2011), the public service in Nigeria has setbacks mostly as a result of the failure to implement those measures that can enhance employee performance; in considering this, the study examined the performance appraisal systems and employee development in Primary Schools in Enugu North Local Government Area of Enugu State.

Statement of the Problem

People are responsible for the management and direction of organizations, and it is through the efforts of individuals that goals and objectives established in the organizations are achieved (Toppo and Prusty, 2012). That is, the cumulative performance of an organization’s members is directly proportional to the organization’s performance as a whole. Because of this, an organization’s ability to correctly evaluate its members’ performance and objectively use that information to maximize those members is essential to its success. Also, due to the intense competition in the market today, organizations need to ensure that their employees maintain their high performance consistently to compete effectively and thrive in the marketplace (Toppo & Prusty, 2012). Some research has been done on the performance appraisal in the Nigeria Education System, where researchers looked at teachers’ perceptions of the performance appraisal. Their studies revealed that most teachers had a positive impression of the performance appraisal process, and were pleased with the outcome (Onyije, 2015).

To achieve this, employee performance appraisals are important in the organization as they shed light on how each worker contributed to achieving the school’s goals. In addition, employees can benefit from receiving constructive criticism on how they could have done better. Therefore, conducting performance appraisals on employees is one of the world’s most important and widely used human resource management and development practices. Furthermore, performance appraisal requires that the head of the teacher evaluate the work performance of their teaching and non-teaching staff regularly to facilitate the implementation of any necessary actions to improve their performance.

Purpose of the Study

This study examined the influence of performance appraisal systems on teachers’ development in primary schools in Enugu North Local Government Area.

Objectives

Specifically, the study sought to determine:

  1. The top-down appraisal influences teachers’ development in primary schools in the Enugu North Local Government Area.
  2. The 360-degree feedback appraisal influence on teachers’ development in primary schools in Enugu North Local Government Area
  3. The objective-based evaluation appraisal influence on teachers’ development in primary schools in Enugu North Local Government Area

Research Questions

The following questions guided this work:

  1. What is the influence of top-down appraisal on teachers’ development in primary schools in Enugu North Local Government Area?
  2. What is the influence of 360-degree feedback appraisal on teachers’ development in primary schools in Enugu North Local Government Area?
  3. What is the influence of objective-based evaluation appraisal on teachers’ development in primary schools in Enugu North Local Government Area?

Hypotheses

The following three null hypotheses were formulated to guide the study and will be tested at a 0.05 level of probability:

HO1: There is no significant difference between top-down appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

HO2: There is no significant difference between the 360-degree feedback appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

HO3: There is no significant difference between the objective-based evaluation appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

Scope of the study

The scope of this study is restricted to performance appraisal systems’ influence on employees` development in primary schools. The individuals involved in this study are the primary school teachers in Enugu North Local Government Area. The study determined the top-down appraisal influence on teachers’ development in primary schools in Enugu North Local Government Area. The 360-degree feedback appraisal influence on teachers’ development in primary schools in Enugu North Local Government Area and the objective-based evaluation appraisal influence on teachers’ development in primary schools in Enugu North Local Government Area

Significance of the Study

The result of this study will be of great importance to the teachers, head teachers, Policy Makers, and Governments.

Performance appraisal systems serve as a valuable tool for enhancing teacher development across various levels of the education system. Teachers benefit from receiving meaningful feedback on their performance, which can guide their professional growth and ultimately improve their teaching practices.

Headteachers can use appraisal data to identify specific areas for improvement among their staff, tailor professional development initiatives, and provide targeted support where needed.

Policymakers can leverage performance appraisal insights to design evidence-based policies that support continuous teacher development and overall school improvement.

The information that will be generated may be significant to the government on the need to improve the conditions of service of staff personnel under its service; these will go a long way in improving staff personnel development in schools and enhancing teachers’ effectiveness and efficiency in service delivery. Governments can use the data gathered from appraisal systems to inform resource allocation, training programs, and policy decisions that enhance teaching quality and student outcomes on a broader scale.

REVIEW OF RELATED LITERATURE

The review of related literature for this study is presented under the following major headings:

Conceptual Framework:

  • Performance Appraisal
  • Performance Appraisal System
  • Employee Development

Theoretical Framework:

  • Herzberg’s Two-Factor Theory (1968)

Related Empirical Studies

Summary of Related Literature

Performance Appraisal

A performance appraisal, according to Obi (2016), is “an evaluation done on an employee’s job performance over a period”. If done correctly, it can assist employees improve their productivity, income, and prospects for promotions, encourage communication between managers and staff, and boost individual and group effectiveness. Performance evaluation “offers a reasonable, substrate, or mechanism for evaluating the significance of each employee to the accomplishment and performance of organizational desired outcomes,” claims (Onyije, 2015). It is a challenging managerial function that calls for extra maturity, fairness, and objectivity when evaluating each employee’s performance on the job based on clear job-related criteria.

Performance appraisal is a formal process of evaluating organizational members including establishing performance standards, appraisal-related behaviors of ratters, determining performance rating, and communicating the rating to the employee under scrutiny (Debrincat, 2015). The primary focus of all appraisals is to measure the actual performance of the employee and to perceive the areas of flaws on the part of employees. Although the relationship between appraisals and performance may not be direct and causal, their influence on performance may be attributed to their ability to enhance role clarity, communication effectiveness, merit pay and administration, expectancy and instrumentality estimates, and perceptions of equity (Yehuda, 1996). Factors that contribute to poor performance appraisal include inadequate knowledge of appraisal systems; unclear performance standards, lack of inputs from staff in designing assessment tools thereby staff perceiving the whole process as unfair and rather biased; lack of feedback to employees; inadequate training to both staff and supervisors on the appropriate design and use of the appraisal tool (Okoro, Nebo and Nwosu, 2017).

Performance Appraisal System

A performance appraisal system (PAS) is a set of procedures designed to track, evaluate, and improve workers’ contributions to the organization’s growth (Brefo-Manuh et al., 2016). It entails a methodical and formal approach to establishing the strengths and weaknesses of the employee’s roles and functions through observing, identifying, developing, measuring, and recording. In the Nigerian educational system, performance appraisal allows for accurate competence assessments. It establishes certain targets for improvement, data recording, and information analysis, and it also helps administrators reward teachers based on their work output. The process begins with setting clear performance objectives, followed by establishing performance standards and communication with employees, then analyzing employee performance on the job and honest discussion of their evaluations (Kyei & Junior, 2021). The Nigeria Educational System is responsible for appraising teachers once or twice a year through the Circuit Supervisors and head teachers, based on reviewing teachers’ lesson plans, grading student work, monitoring teachers’ attendance, etc. Those responsible for that duty for some time now are not functional or not active as teachers have not been supervised for so long (Okeke, Onyekwelu, Akpua, and Dunkwu, 2019).

A performance appraisal system is a structured process that organizations use to assess and evaluate the job performance of their employees. The system typically involves setting clear performance expectations, collecting and analyzing performance data, providing feedback, and using the information gathered to make decisions about compensation, promotions, training, and professional development. The first step in a performance appraisal system is to establish clear and specific performance expectations for roles in an organization. This may involve setting goals, defining key performance indicators (KPIs), or outlining the competencies and behaviors expected of employees (Orga, Ekechukwu, and Mbah, 2018).

A well-designed performance appraisal system should be transparent, fair, and aligned with the organization’s goals and values. It should also encourage open communication between employees and management, fostering a culture of accountability and continuous improvement. Additionally, it should be regularly reviewed and updated to ensure it remains effective and relevant in supporting the organization’s objectives (Mollel, Mulongo, and Razia, 2017). In the context of primary schools in Enugu North, a tailored performance appraisal system for teachers and staff should consider the unique aspects of the educational environment and the specific competencies and qualities that contribute to successful teaching and learning outcomes. The system should be designed to support professional growth, align with the school’s educational objectives, and ultimately contribute to the improvement of the learning experience for students.

Employee Development

Employee training and development are at the heart of employee utilization, productivity, commitment, motivation, and growth. Many employees have failed in organizations because their need for training was not identified and provided for as an indispensable part of management function (Nwachukwu, 2017). In this study, staff development, training, and in-service training are defined as follows: staff development is the process whereby the teachers are empowered to grow in the teaching job, through experiences and increasing confidence resulting from the exercise of varied and tested responsibilities. The aim is to enable them to reach the top or achieve their best in their teaching profession. Training is an organized, coordinated development of knowledge, skills, and attitudes for one to master teaching and learning situations to enable them to perform teaching and learning tasks in school. In-service training, on the other hand, is any activity or process intended to improve the skills, attitudes, understanding, or performance of teachers in their present or future teachings in schools. In-service training is an organizational effort aimed at helping teachers acquire basic skills required for the efficient execution of the teaching functions for which they are employed. No matter the efficiency of performance on his job, no matter the effectiveness of pre-service education received by any teacher, there will necessarily be areas of inadequacies. In-service education not only addresses these inadequacies but also imparts new skills and technologies that were yet to exist during the teacher’s pre-service training programs. It upgrades the teachers in areas of special needs and improves their knowledge, skills, attitudes competence, and innovative potential (Bosah, 2015). Staff development deals with the activities undertaken to expose teachers to perform additional duties and assume positions of performance in the school hierarchy (Odo, 2016).

            Teacher productivity is a function of ability will and situational factors. An organization such as a school may have teachers of ability and determination, with appropriate equipment and managerial support yet productivity falls below expected standards (Nwachukwu, 2017). The missing factor in many cases is the lack of adequate skills and knowledge which are acquired through training and development.

Herzberg’s Two-Factor Theory (1968)

            The Theoretical framework adopted for this study is Herzberg’s theory of Motivation. It was propounded by Frederick Herzberg in 1968. Herzberg carried out studies to determine which factors in an employee’s work environment caused satisfaction or dissatisfaction. He found that the factors causing job satisfaction were different from those causing job dissatisfaction. He called the satisfiers motivators and the dissatisfiers hygiene factors. According to him, people are influenced by these two factors. Motivation factors are needed to motivate an individual to higher performance. Hygiene factors are to ensure that an individual does not become dissatisfied. They do not lead to higher levels of motivation, but without them there is dissatisfaction. Motivation factors that lead to satisfaction are promotion opportunities, opportunities for personal growth, recognition, responsibility, and achievement. Hygiene factors that lead to dissatisfaction are quality of supervision, salary, policies, working conditions, status, relations with others, and security.

            We should note that to encourage high productivity at workplaces workers must be motivated by management. Management must design meaningful roles that help employees derive recognition, a sense of achievement, growth, and responsibility. Knowledge of the existence of the two groups of factors is essential to management. They are both essential factors for employee motivation and retention, while the satisfaction of the motivation factors leads to better performance, the satisfaction of hygiene or maintenance factors will enhance employee’s job stability or retention.

Many teachers in Nigeria leave the teaching profession in search of better work simply because of job dissatisfaction. Some teachers who cannot leave the profession completely are just hanging on waiting for the slightest opportunity to move out. This unfortunate situation leads to brain drain which adversely affects the Nigerian educational system. Governments and educational managers at all levels should understand that regular payment of salaries and allowances is just a hygiene factor that eliminates job dissatisfaction among teachers and not a motivating factor perse. Workers at every level of the education industry should be motivated to work by the authorities concerned. Nigerian teachers generally and particularly teachers in primary schools in Enugu North Local Government Area need to be given the front seat in the scheme of things. Teachers need to be held in high esteem and their efforts towards nation-building should be recognized in both actions and utterances. Research has tremendously shown that no human being whose ego and personal worth are not valued puts in his best in the organization where he works. The basic lesson of Herzberg’s research is that managers such as employers of teachers in the primary school should first eliminate dissatisfaction, making sure that working pay levels and organizational policies are reasonable. They should then concentrate on spurring motivation by providing opportunities for achievement, recognition responsibility, and personal growth.

Empirical review

Mandara, Ibrahim, Zailani, and Ali Manir (2019) conducted research on the impact of performance evaluations on employee productivity in the Abuja headquarters of the Federal Ministry of Education. The method of investigation for the present investigation utilized questionnaires. Information for this investigation was gathered using standardized survey responses and quantitative and OLS procedures were run to examine the results. The findings demonstrate that worker productivity during the investigation period was positively and significantly impacted by the factors of appraising effectiveness and input from employees. The employee training and compensation coefficients had a positive, albeit minor, impact on staff productivity over the research period.

The distinguishing differences between the current study and that of Mandara, Ibrahim, Zailani, and Ali Manir (2019) were in the areas of scope, methodology, subject area, and statistical analysis procedure among others. However, the current study and that of Mandara, Ibrahim, Zailani, and Ali Manir (2019) have no similarities. 

Summary of Related Literature

Literature was reviewed under conceptual framework, theoretical framework, and empirical studies. The conceptual framework talked about performance appraisal, performance appraisal system, employee development, performance appraisal, and employee productivity. The review covered Herzberg’s Two Factor Theory (1968) Herzberg carry out the studies to determine which factors in an employee’s work environment caused satisfaction or dissatisfaction. He found that the factors causing job satisfaction were different from those causing job dissatisfaction. He called the satisfiers motivators and the dissatisfiers hygiene factors. According to him, people are influenced by these two factors. Motivation factors are needed to motivate an individual to higher performance.

A well-designed performance appraisal system should be transparent, fair, and aligned with the organization’s goals and values. It should also encourage open communication between employees and management, fostering a culture of accountability and continuous improvement. Additionally, it should be regularly reviewed and updated to ensure it remains effective and relevant in supporting the organization’s objectives.

However, the researcher observes that much research has been carried out in the area of Imperatives of performance appraisal on employee performance, Performance appraisal, and employee development in the university of education and Performance appraisal system and teacher effectiveness in public secondary schools but it appeared no aspect highlighted or discussed the performance appraisal systems and employee development in Primary Schools. This is the gap this study is set to fill as a contribution to knowledge.

METHODOLOGY

This chapter presents the procedure that was used in carrying out this study.

Research Design

This study adopts a descriptive survey research design. A descriptive survey research design, according to Nworgu (2016) uses a sample of an investigation to document, describe, and explain what is in existence or non-existence on the present status of the phenomena being investigated. The author further stated that in a descriptive survey study views and facts are collected through questionnaires and/or interviews scheduled for answering research questions. A descriptive survey research design was suitable for this study because data was collected through a questionnaire from primary school teachers.

Area of the Study

The area of the study is Enugu North Local Government Area. Enugu North Local Government Area is one of the seventeen Local Government Areas in Enugu State.  The study covered all the public primary schools Enugu North Local Government Area. Enugu North Local Government Area is located within the Enugu Urban part of Enugu State. There are fifty-four (54) primary schools in Enugu North Local Government Area. The area was chosen for the study.

Population for the Study

The population for the study is 481 primary school teachers in Enugu North Local Government Area. The available statistics from the State Universal Basic Education Board (SUBEB, 2024) 

Sample and Sampling Technique

A sample size of 218 Public primary school teachers was used for the study.  The sample size was determined using Taro Yamane’s formula: n = N/(1+N(e)2

Where N = Population size (481), n = Required sample size, e = tolerate error (0.05), and 1= Constant.

Instrument for Data Collection

The instrument used for data collection was a structured questionnaire. The instrument is titled “Performance Appraisal Systems and Employee Development Questionnaire (PASEDQ). The questionnaire was made up of three research questions. Research question one was made to elicit information on the influence of 360-degree feedback appraisal on teachers’ development in primary schools. Research question two was made to elicit information on the influence of 360-degree feedback appraisal on teachers’ development in primary schools and research question three was made to elicit information on the influence of objective-based evaluation appraisal on teachers’ development in primary schools. The instruments were an 18-item questionnaire structured in line with the research question. The questionnaire is modified Likert scale of four points with a scaling of Strongly Agree, (SA), Agree (A), Disagree (D), and Strongly Disagree (SD) with scores of 4, 3, 2, and 1 respectively.

Validation of the Instrument

The instrument was validated by two lecturers from the Business Education Department and Measurement and Evaluation from Enugu State College of Education (Technical), Enugu. Each validator was given a copy of the instrument to eliminate any irrelevant statement presented by the researcher and to make suggestions for improving the instrument. The suggestions from validates were integrated into the final copy of the questionnaire that was developed.

Reliability of the Instrument

To determine the reliability of the instrument, the researcher sampled the questionnaire to the same group of teachers at two different points in time and then calculated the correlation between the two sets of results. To test the reliability of the instrument, ten (10) copies of the instrument were administered to Public Primary School Teachers in Enugu South Local Government Area. The choice of Enugu South Local Government Area for the reliability test is informed by the number of common factors in the social and educational development of the two Local Government Areas. The internal consistency of the instrument was established using Cronbach’s Alpha method. The value of the reliability coefficient established is as follows: Research question one, what is the influence of top-down appraisal on teachers’ development in primary schools 0.91; Research question two, What is the influence of 360-degree feedback appraisal on teachers’ development in primary schools 0.98 and Research question three, What is the influence of objective-based evaluation appraisal on teachers’ development in primary schools 0.98. To get the average we added 0.91 + 0.98 + 0.98 = 2.87/3 amounting to 0.96. The reliability coefficient is 0.96 indicating that the instrument was of highly reliability.

Method of Data Collection

To ensure a high percentage of returns, the questionnaires were administered to the respondents by the researcher with the aid of one trained research assistant. The questionnaires were collected back from the respondents after two weeks of administration. Out of 218 questionnaires administered, 202 were duly filled by the respondents and were returned. It was this number that was analyzed to generate the data used for answering the research questions and hypotheses. The rate of return was 92.66%.

Method of Data Analysis

Data collected were computed using Mean and Standard Deviation. The Mean and Standard Deviation were used to answer the three research questions. The statistic was used to test the three null hypotheses at 0.05 level of probability. All computations were carried out using Statistical Package for Social Sciences (SPSS). The boundary limits for interpreting mean scores of the questionnaire items in order to answer the research questions are as follows;

Scaling Statement Real Limit

Strongly Agreed (SA) =         4 points 3.50 – 4.49

Agreed (A) =                          3 points 2.50 – 3.49

Disagreed (D) =                      2 points 1.50 – 2.49

Strongly Disagree (SD) =       1 point 0.50 – 1.49

From the above real limit, a mean of 3.50 – 4.49 was accepted as Strongly Agreed, 2.50 – 3.49 was accepted as Agreed, 1.50 – 2.49 was accepted as Disagreed, and 0.50 – 1.49 was accepted as Strongly Disagreed.

Decision rule

Descriptive statistical tools of mean were used to analyze the data. Nominal values of 4, 3, 2, and 1 were assigned to the response options; Strongly Agree is 4, Agree is 3, Disagree is 2, and Strongly Disagree is 1. The mean was calculated by using the formula: X = ∑     Where X = mean, ∑ = summation factor, f = frequency, x = nominal values, and N = total sample size. To get the cut-off point for the interpretation of the respondents the average of the weighted score nominal values assigned to the response options. Thus:

  =    = 2.50

Thus 2.50 was used as the benchmark for interpreting the respondent’s mean score.  As a result, any item with a mean score of 2.50 and above was interpreted as Agree (A) while any mean score below 2.50 was regarded as Disagree (D). Concerning the hypotheses, the hypotheses were accepted because the calculated t-value is less than the critical value also the P-value is greater than the alpha value of the .05 level of probability. All computations were carried out using version 23.0 of the Statistical Package for the Social Sciences (IBM SPSS 23) was employed for the goal of carrying out descriptive statistics on the respondents as well as the basic data analysis such as mean and standard deviation analysis. In the second step, IBM SPSS was used to analyze the Independent Samples T-Test for the hypotheses.

RESULTS AND ANALYSIS

In this chapter, the data for the study were presented and analyzed based on the research questions and hypotheses that guided the study. The presentation and analyses were as follows.

Research Question 1

What is the influence of top-down appraisal on teachers’ development in primary schools in Enugu North Local Government Area?

Table 1: Mean Responses on the influence of top-down appraisal on teachers’ development in primary schools

S/NoITEMSSA 4A 3D 2SD 1  No X  S.D  Decision
1The top-down appraisal helps maintain professional standards by ensuring that teachers meet the expected benchmarks687928272022.931.005Agree
2Top-down appraisal holds teachers accountable for their performance and adherence to set standards266810442022.570.738Agree
3It led to professional growth by setting clear expectations and goals for improvement777434172023.040.943Agree
4A top-down appraisal provides teachers with evaluation from higher authorities that identify areas for improvement664772172022.800.993Agree
5It encourages teachers to enhance their skills and competencies61795752022.970.828Agree
6It led to recognition that boosted morale and motivation among teachers471876612022.920.924Agree
 Grand Mean     2.87  

The results of the data analyses in Table 1 revealed that out of the six (6) items in Table 1, the respondents agreed that all the items on the influence of top-down appraisal on teachers’ development in primary schools in Enugu North Local Government Area as they recorded from mean Scores of 2.93, 2.57, 3.04, 2.80, 2.97 and 2.92 respectively. These scores are more than the cut-off point of 2.50. the table also showed that the respondents recorded a grand mean of 2.87. All the standard deviation scores are small signifying that their responses are homogenous. Going by the benchmark for the interpretation of the respondent’s mean score; the answer to research question 1 is that top-down appraisal positively influences teachers’ development in primary schools.

Research Question 2

What is the influence of 360-degree feedback appraisal on teachers’ development in primary schools in Enugu North Local Government Area?

Table 2: Mean Responses on the influence of 360-degree feedback appraisal on teachers’ development in primary schools

S/NoITEMSSA 4A 3D 2SD 1  No  X  S.DDecision
7360-degree feedback increased self-awareness through multiple perspectives60657252022.890.863Agree
8It enhances communication and collaboration skills841457472022.671.235Agree
9Promotion of growth mindset among teachers776545152023.010.952Agree
10Fostering a supportive and constructive feedback environment80368602022.970.908Agree
11Building trust and rapport among colleagues308935482022.501.014Agree
12Encouraging ongoing dialogues about professional development825748152023.020.972Agree
 Grand Mean     2.84  

 The results of the data analyses in Table 2 revealed that out of the six (6) items in Table 2, the respondents agreed that all the items on the influence of 360-degree feedback appraisal on teachers’ development in primary schools in Enugu North Local Government Area as they recorded from mean Scores of 2.89, 2.67, 3.01, 2.97, 2.50 and 3.02 respectively. These scores are more than the cut-off point of 2.50. The table also showed that the respondents recorded a grand mean of 2.84. All the standard deviation scores are small signifying that their responses are homogenous. Going by the benchmark for the interpretation of the respondent’s mean score; the answer to research question 2 is that 360-degree feedback appraisal positively influences teachers’ development in primary schools.

Research Question 3

What is the influence of objective-based evaluation appraisal on teachers’ development in primary schools in Enugu North Local Government Area?

S/NoITEMSSA 4A 3D 2SD 1  No  X  S.DDecision
13Objective-based evaluation helps teachers clearly understand what is expected of them371194152022.930.695Agree
14It allows for targeted professional development opportunities50807112022.890.780Agree
15Motivate teachers to engage in their development actively598018452022.761.104Agree
16Help teachers identify areas for improvement and work towards enhancing their teaching skills521212092023.070.730Agree
17It led to increased commitment and responsibility towards their professional growth27878712022.690.702Agree
18Objective evaluations provide data that can be used to make informed decisions about teacher development initiatives431015352022.900.753Agree
 Grand Mean     2.87  

Table 3: Mean Responses on the influence of objective-based evaluation appraisal on teachers’ development in primary schools

 The results of the data analyses in Table 3 revealed that out of the six (6) items in Table 3, the respondents agreed that all the items on the influence of objective-based evaluation appraisal on teachers’ development in primary schools in Enugu North Local Government Area as they recorded from mean Scores of 2.93, 2.89, 2.76, 3.07, 2.69 and 2.90 respectively. These scores are more than the cut-off point of 2.50. The table also showed that the respondents recorded a grand mean of 2.87. All the standard deviation scores are small signifying that their responses are homogenous. Going by the benchmark for the interpretation of the respondent’s mean score; the answer to research question 3 is that objective-based evaluation appraisal has a positive influence on teachers’ development in primary schools.

Null Hypothesis 1 (Ho1)

There is no significant difference among the mean responses of male and female teachers on top-down appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

Table 4: t-test analysis of the difference between the mean ratings of male and female   

               teachers on top-down appraisal systems and teachers’ development in

               primary schools in Enugu North Local Government Area.

Table 4:                                                                         Independent Samples Test
 Levene’s Test for Equality of Variances                                  t-test for Equality of Means
FSig.tdfP-Value or Sig. (2-tailed)Mean DifferenceStd. Error Difference95% Confidence Interval of the Difference
LowerUpper
 Equal variances assumed.287.593-.269200.788-.111.411-.921.700
Equal variances are not assumed.  -.26471.708.792-.111.418-.945.723

The t-test analysis presented in Table 4 revealed that the t-value is -.269 which is less than the critical value of 1.962 meaning that there is no statistically significant difference in the mean ratio of male and female teachers on top-down appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area. Moving further, as we can see in Table 4 the P-value is .788 which is greater than the alpha value of .05. This indicates that there is no statistically significant difference in the mean ratio of male and female teachers on top-down appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area. Therefore, the null hypothesis of no significant difference is accepted.

Null Hypothesis 2 (Ho2)

There is no significant difference among the mean responses of male and female teachers on 360-degree feedback appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

Table 5: t-test analysis of the difference between the mean ratings of male and female   

               teachers on 360-degree feedback appraisal systems and teachers’ development

               in primary schools in Enugu North Local Government Area.

Table 5:                                                                         Independent Samples Test
 Levene’s Test for Equality of Variances                                  t-test for Equality of Means
FSig.tdfP-Value or Sig. (2-tailed)Mean DifferenceStd. Error Difference95% Confidence Interval of the Difference
LowerUpper
 Equal variances assumed.450.5031.007200.315.345.343-.3311.021
Equal variances are not assumed.  .96869.526.337.345.357-.3661.057

The t-test analysis presented in Table 5 revealed that the t-value is 1.007 which is less than the critical value of 1.962 meaning that there is no statistically significant difference in the mean ratio of male and female teachers on 360-degree feedback appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area. Furthermore, as we can see in Table 5 the P-value is .315 which is greater than the alpha-value of .05. This indicates that there is no statistically significant difference in the mean ratio of male and female teachers on 360-degree feedback appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area. Therefore, the null hypothesis of no significant difference is accepted.

Null Hypothesis 3 (Ho3)

There is no significant difference among the mean responses of male and female teachers on the objective-based evaluation appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

Table 6: t-test analysis of the difference between the mean ratings of male and female   

               teachers on the objective-based evaluation appraisal systems and teachers’

               development in primary schools in Enugu North Local Government Area.

Table 6:                                                                         Independent Samples Test
 Levene’s Test for Equality of Variances                                  t-test for Equality of Means
FSig.tdfP-Value or Sig. (2-tailed)Mean DifferenceStd. Error Difference95% Confidence Interval of the Difference
LowerUpper
 Equal variances assumed.570.4511.260200.209.340.270-.192.871
Equal variances are not assumed.  1.29576.724.199.340.262-.183.862

The t-test analysis presented in Table 6 revealed that the t-value is 1.260 which is less than the critical value of 1.962 meaning that there is no statistically significant difference in the mean ratio of male and female teachers on the objective-based evaluation appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area. Furthermore, as we can see in Table 6 the P-value is .209 which is greater than the alpha-value of .05, this indicates that there is no statistically significant difference in the mean ratio of male and female teachers on the objective-based evaluation appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area. Therefore, the null hypothesis of no significant difference is accepted.

Summary of the Major Findings

Based on the presentation and interpretation of the data analyzed, the major findings of this study can be seen as follows:

  1. Top-down appraisal has a positive influence on teachers’ development in primary schools in Enugu North Local Government Area.
  2. 360-degree feedback appraisal has a positive influence on teachers’ development in primary schools in Enugu North Local Government Area
  3. Objective-based evaluation appraisal has a positive influence on teachers’ development in primary schools in Enugu North Local Government Area.
  4. Data analyzed in Table 4 showed that there is no significant difference between the mean ratings of male and female teachers on top-down appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.
  5. Data analyzed in Table 5 showed that there is no significant difference between the mean ratings of male and female teachers on 360-degree feedback appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.
  6. Data analyzed in Table 6 showed that there is no significant difference between the mean ratings of male and female teachers on the objective-based evaluation appraisal systems and teachers’ development in primary schools in Enugu North Local Government Area.

Discussion of the Findings

The finding in Table 1 revealed that the respondents agreed that Top-down appraisal has a positive influence on teachers’ development in primary schools in Enugu North Local Government Area. The finding was in support of Cardy and Dobbins (2014) who posited that top-down appraisal in educational settings can significantly influence teacher development by shaping their professional growth trajectory. When implemented effectively, it can serve as a roadmap for improvement, highlighting areas of strength and areas needing enhancement. Clear expectations and feedback provided through this process can help teachers align their practices with school objectives and student needs. The top-down appraisal can contribute to a culture of continuous learning and development within a school community. Promoting accountability and setting standards for performance, motivates teachers to strive for excellence and engage in ongoing reflection on their teaching practices. This, in turn, can lead to increased student achievement and overall school success.

The finding in Table 2 revealed that the respondents agreed that the 360-degree feedback appraisal has a positive influence on teachers’ development in primary schools in Enugu North Local Government Area. The above result is in line with the view of Bracken and Rose (2011) who agree that the 360-degree feedback appraisal is a valuable tool in providing a holistic assessment of an individual’s performance and behavior within an organization. By collecting feedback from various sources, employees receive a more comprehensive and diversified perspective on their strengths, weaknesses, and areas for improvement.

The finding in Table 3 revealed that the respondents agreed that the Objective-based evaluation appraisal has a positive influence on teachers’ development in primary schools in Enugu North Local Government Area. The findings were supported by Nathan and Andrew (2012) that the Objective-based evaluation appraisal has a profound impact on teacher development. It fosters a culture of continuous learning and self-improvement. By setting clear benchmarks, it enables teachers to track their progress and take proactive steps toward growth. Teachers can receive constructive feedback based on specific objectives, leading to targeted professional development opportunities. This approach also promotes a sense of accountability and ownership in teachers, encouraging them to strive for excellence. Furthermore, objective evaluation aligns individual teacher goals with school priorities, ensuring a cohesive approach to professional development within the institution.

Educational Implications

Performance appraisal systems influence on teachers’ development in primary schools in Enugu North Local Government Area looked at top-down,360-degree, and objective-based evaluation appraisal as types of performance appraisal systems and the influence on teacher development. The top-down appraisal emphasizes authority and control, potentially hindering teacher empowerment and growth. 360-degree feedback encourages a well-rounded assessment, fostering collaboration and reflective practice among teachers. Objective-based evaluation promotes clear goals and criteria for improvement, enhancing accountability and skill development. By combining these approaches, primary school teacher development can benefit from a balanced mix of structured guidance, collaborative feedback, and goal-setting, leading to a more comprehensive and effective professional growth strategy.

SUMMARY, CONCLUSION AND RECOMMENDATIONS

This chapter presents the concluding part of the study and is presented under the following sub-headings: summary of the study, conclusion, recommendations, limitations of the study, and suggestions for further studies.

Summary of the Study

The study sought to determine the performance appraisal systems’ influence on teachers’ development in primary schools in Enugu North Local Government Area. In carrying out this research, three specific purposes with their corresponding research questions and three null hypotheses were formulated to guide the study. Relevant theory was reviewed to guide the study. The design of the study is a descriptive survey design. The population of the study comprised 481 primary school teachers in primary schools in Enugu North Local Government Area. The sample size comprised two hundred and two (202) primary school teachers and was determined using Taro Yamane’s formula.

The instrument for data collection was the researcher’s developed questionnaire and hypothesis to elicit information from the respondents. After developing the structured questionnaire, it was properly validated by two experts in the relevant field, all in Enugu State College of Education Technical. The reliability coefficient was 0.96 which showed that the test was reliable. The statistical tool used to determine mean, standard deviation, and t-test is Statistical Package for the Social Sciences (IBM SPSS 23).

Conclusion

This study examined the performance appraisal systems’ influence on teachers’ development in primary schools in Enugu North Local Government Area. This study has shown that performance appraisal systems can serve as a basis for identifying training needs and designing targeted professional development programs for teachers. By evaluating teacher performance against set criteria and standards, these systems can highlight areas where additional support or training may be necessary. This personalized approach to development can lead to more effective teaching practices and ultimately benefit students’ learning experiences.

Moreover, performance appraisal systems help to recognize and reward outstanding teachers for their hard work and dedication. By acknowledging and celebrating teachers’ achievements, these systems can boost morale, motivation, and job satisfaction, creating a positive work environment conducive to continuous improvement and growth.

Recommendations

The following recommendations were made:

  1. Teachers should be encouraged to open communication channels for feedback on performance to ensure teachers feel supported and valued in their development.
  2. The Ministry of Education should provide clear guidelines and training on how to effectively implement appraisal systems to promote consistent evaluation across all schools.
  3. Educational administrators should offer resources and opportunities for professional development tailored to address areas identified through appraisals for continuous growth.
  4. Teachers should foster a culture of continuous learning and improvement by encouraging self-reflection and goal-setting based on appraisal feedback.
  5. The Ministry of Education should invest in technology solutions that streamline the appraisal process, making it more efficient and ensuring data-driven decision-making.
  6. Educational administrators should establish support mechanisms such as mentorship programs and peer learning communities to allow for collaboration and sharing of best practices.

Limitations of the Study

In the course of collecting information, tools, and materials for this study, certain limitations were met. They are inadequate resources, finance, and data collection challenges.

Inadequate resources: there were inadequate resources in the libraries like books on the topic and the ones available were not current.

Finance: The researcher finds it challenging to assess some materials due to finance to get them.

Data Collection Challenges: the researcher finds it difficult to assess some materials due to protocols and waiting for approval from the authorities in charge.

However, these constraints did not prevent the researcher from carrying out this study.

Suggestions for Further Study

Based on the findings, the following is suggested for further study.

  1. This study can be replicated by other researchers using the same subjects in a different location or different subjects in the same or different locations.
  2. Performance appraisal systems and the teacher’s effectiveness on students’ performance in primary schools.

PERFORMANCE APPRAISAL SYSTEMS INFLUENCE ON TEACHERS’ DEVELOPMENT IN PRIMARY SCHOOLS IN ENUGU NORTH LGA Read More »

PERCEPTION OF NEW GENERAL INSURANCE SERVICES IN NIGERIA BY SMALL AND MEDIUM ENTERPRISES (SMEs) IN ENUGU STATE

BY
 
NGOZI OBIOHA-NKEMDIRIM
DOCTOR OF STRATEGIC MANAGEMENT AND LEADERSHIP DEVELOPMENT PROGRAMME
LEARN TO LIVE BUSINESS SCHOOL, UK.
 
08037114608
ngshalom30@gmail.com
 
2024.

ABSTRACT:

SMEs are entrepreneurial initiatives and engines of economic development. They bear a lot of risks, which require cover under insurance companies. Initially, apathy was observed among the SMEs due to the poor performance of the insurance industries. However, the establishment of the National Insurance Commission (NAICOM) in 1997, ushered in a paradigm shift in the management of the insurance companies. This paper examined the perception of SMEs in Enugu state on the new general insurance services to determine the SMEs’ level of awareness and satisfaction with this paradigm shift. Two research questions and two hypotheses guided the study. A non-experimental ex-post facto research design was employed. A sample of 273 was drawn through a purposive, accidental, and snowballing sampling technique from 911 registered SMEs in the state. A questionnaire and interview schedule were used to collect data was analyzed using means and standard deviation. The results show that the SMEs are Not Aware of and Not Satisfied with the paradigm shift in the management of general insurance companies and are Not Willing to patronize insurance companies in Nigeria. No significant difference was found between the small and medium-scale enterprises. More sensitization of SMEs on the activities of NAICOM was recommended.

Keywords: Perception; Awareness; Satisfaction; Paradigm shift; Insurance; Small and Medium scale Enterprises (SMEs).

INTRODUCTION:

Background of the Problem:

Insurance is a financial and service product that helps protect individuals and businesses from potential losses or risks. It can also be described as a contract between two parties: the insurer (the insurance company) and the insured (the person or business being covered), where the insured pays a premium (a regular payment) to the insurer, who then promises to pay for specific losses or damages if they occur (https://www.naicom.nation.gov.ng). This is probably why Vaughan (2014) perceived it as an economic device whereby the individual substitutes a small certain cost (the premium) for a large uncertain financial loss (the contingency insured against).

Originally. insurance started with the practice of merchants in Italy in the 12th century. The history of insurance in Nigeria started as far back as the colonial era when the first Nigerian.

The insurance company, Royal Exchange Assurance Company, was established by the British, in 1921. Other local and foreign insurance companies followed. Later, the number of insurance companies licensed to operate in Nigeria rose to 67, as reported by NAICOM in Sunday Punch, 21 Aug 2023. Initially, the insurance sector was not managed by professionals and very little legal attention was paid to it in Nigeria, (Boma, 2019).

The traditional concept of mutual insurance found in many customary or communal practices “whereby members of a family or community collectively come to aid another member in times of disaster or misfortune” (Ajemunigbohun and Ayobami 2018), seemed to overcloud the initial practice of insurance in Nigeria. The pre-independence insurance market shows that before 1961, there was no statutory requirement for the registration of insurance businesses in Nigeria. The first legislation was the Insurance Companies Act of 1961 followed by others, but Insurance Decree 1997, established the supervisory body, National Insurance Commission (NAICOM) headed by the Commissioner for Insurance as applicable under the National Insurance Supervision Board (NISB), for more effective control and better supervision of the industry (Ajemunigbohun and Ayobami 2018). With the establishment of NAICOM as the supervisory body, professionals were introduced to the system of administration, and innovations were ushered into insurance management in Nigeria. This paradigm shift in administration changed the idea that insurance doesn’t work because previously when the insurance business was managed by agents who were not insurance professionals, claims were not paid at and when due to claimants but now the narrative is different as a result of the regulatory practices of the new Governing Board governing body, NAICOM. Claims were not paid to the claimant but currently, the narrative is different because insurance companies are now managed by Professionals with a regulatory board- NAICOM.   Governing.   The   primary   functions   of   NAICOM as indicated in … https://www.nairametrics.com.)  include:

  1. Licensing and regulating insurance companies
  2. Setting standards for insurance products and services
  3. Ensuring compliance with insurance laws and regulations
  4. Protecting policyholders’ interests
  5. Promoting the development of the insurance industry in Nigeria, with the following goals;
    1. 1 Enhance the stability and soundness of the insurance industry
    1. 2. Increase public confidence in insurance
    1. 3. Encourage innovation and competition
    1. 4. Protect consumers’ rights
    1. 5. Contribute to Nigeria’s economic growth and development ()

Insurance service products in Nigeria cover the insured’s life, paying a benefit to beneficiaries upon death; Health Insurance which covers medical expenses and healthcare costs; Property Insurance includes damages or losses to property, such as homes or cars; Liability Insurance covers legal liability for damages or injuries caused to others and Business Insurance, which covers businesses against various risks, such as property damage or employee injuries (). The administrative procedure according to (https://www.portal.naicom.gov.ng) involves, Application for insurance coverage; Underwriting, which requires the insurer to assess the risk and determine the premium; and Policy issuance by the insurer, outlining the coverage and terms. Premium payments, whereby the insured pays premiums to maintain coverage; Claim filing, requires the insured to file a claim for a covered loss or damage and Claims processing, where the insure processes and settles the claim. Insurance marketers are expected to explain the application for insurance coverage, and the strategies and tactics used to promote and sell insurance products to potential customers very well during the advocacy. Some key aspects of insurance marketing according to (https://www.naicom.nation.gov.ng) include

  • Target Market Identification: Understanding the demographics, needs, and preferences of potential customers.
  • Product Positioning: Highlighting the unique benefits and features of insurance products
  • Branding: Building a strong brand identity to establish trust and credibility.
  • Digital Marketing involves leveraging online channels such as social media, email, and search engine optimization (SEO).
  • Content Marketing: Creating informative and engaging content to educate and attract customers
  • Lead Generation: Generating leads through various channels, such as referrals, online forms, and events.
  • Sales Strategies: Developing effective sales techniques to convert leads into customers.
  • Customer Retention: Building strong relationships to retain existing customers and encourage loyalty.
  • Data-Driven Marketing: Using data analytics to inform marketing decisions and measure campaign effectiveness.
  • Regulatory Compliance: Ensuring marketing efforts comply with industry regulations and laws.

Small and medium-sized enterprises are usually perceived as vehicles for economic development, especially in developing countries like Nigeria, Abotsi et al., 2014; Ahmed, Abdul- man, 2016; Chatterjee, Wehrhahn, 2017) and closing the gap between the downtrodden and the upper class. SMEs are also described as being labor intensive, the main source of employment, economic advancement, revenue-generating source, and technology innovation. (Ikeotuonye 2019). Studies show that they contribute to over 95% of enterprises, worldwide and about 60% of the private sector employment (Ayyagari, Demirguc-Kunt, Maksimovic 2011) and so with These indicate that their contribution to Nigeria’s economy cannot be overemphasized and should not be left out of the recent innovation in the insurance sector in Nigeria. This governs the concerns of this study. There are many studies on insurance and its performance as well as customers’ perceptions and acceptance (Boma, 2019); most centered on developed countries and in Africa. The only one available to the researcher was carried out in the cosmopolitan city of Lagos. For instance, Diara, Norlida, and Shahrul’s (2023) study is on risk transfer, and Chanti’s (2023) study is on the contribution of insurance companies to the growth of SMEs. Willieth (2020) surveyed insurance demand for SMEs in India, while Unachukwu, Oyewole, Olabode, and Aderonke (2020) focused on SME development amid COVID-19 in Lagos State, Nigeria but not on insurance. Also, Ekerete, Olawoye, Gam, and Ikon (2018) focused on the insurance industry in Nigeria but not on SMEs.

Nevertheless, only (Ajemunigbohun and Ayobami 2018) investigated insurance awareness and acceptance among SMEs in Lagos. Very closely related to this paper is that of Sagagi & Ekperi & Nwadike (2019) which evaluates awareness level and public perception of the image of insurance companies in Enugu state.

However, the study although in Enugu state focused on the public awareness and perception of leaving this study as the first to dwell on the awareness and perceptionof the new general insurance services in Nigeria by SMEs in Enugu state.  This is the lacuna this study filled.

The study scope covers all registered SMEs operating in Enugu state before and after the establishment of NAICOM. SMEs with less than five years of existence will be delimited as they may not be conversant with the paradigm shift in the administration. The study content scope will be limited to awareness of and perception/ satisfaction with NAICOM administration, services, and products.

Statement of the problem:

Enugu state is part of Igboland where the inhabitants are known for their business acumen. However, Enugu is not a cosmopolitan city, and most residents are not as well off as their counterparts in bigger cities. Lagos, Abuja, kano, or Port Harcourt. Consequently, they are very mindful of gains and losses in their business and so are likely to tread cautiously with any policy that may not guarantee profit to their enterprises. Understandably, there was an initial apathy among SMEs in Enugu due to low outputs and poor performance of the insurance industries especially the issue of no settlement of claims, due to one flimsy reason or the other. The Insurance Information Institute (2005) noted that most small business owners are at risk of disaster and do not have a disaster recovery plan. As observed, previously, insurance in Nigeria has been criticized for a lack of trust, low popularity and patronage (Nwankwo and Ajemunigbohun, 2013), low awareness and poor image, and low demand and patronage of insurance products and services. (Sagagi, Marafa & Ekperi, Paul & Nwadike, Stanley 2019) which might have scared the SMEs from patronizing insurance industries. However, due to the innovations, introduced by the new insurance administration in Nigeria, spanning over a decade now, it will be interesting to ascertain if the Small and Medium Enterprises (SMEs) patronage of the insurance sector in Enugu has improved. Could it be said that the introduction of new service products by NAICOM is the elixir that will wake up the SMEs in Enugu state, to benefit from this paradigm shift in management of the Nigerian insurance sector? This is the kernel of this study that investigated the awareness and perception of the new general insurance services in Nigeria: Case of Small and Medium Enterprises (SMEs) in Enugu. The purpose of this study is therefore to examine the level of awareness and perceptions of the SMEs in Enugu state Nigeria on the paradigm shift in the management of general insurance companies in Nigeria. Precisely, the objectives of this study are to:

  1. To find out the level of awareness of SMEs in Enugu state on the paradigm shift in the management of general insurance companies in Nigeria.
  • To determine the level of satisfaction of the SMEs in Enugu with the paradigm shift in the management of general insurance companies in Nigeria.

Research Questions: The following research questions guided this study.

  1. What is the level of awareness of SMEs in Enugu state on the paradigm shift in the management of general insurance companies in Nigeria?
  • What is the level of satisfaction of the SMEs in Enugu with the paradigm shift in the management of general insurance companies in Nigeria?

Hypotheses: These hypotheses were tested at a 0.05 level of probability to guide the study.

HO1: There is no significant difference in the level of awareness of Small and medium-scale Enterprises in Enugu state regarding the paradigm shift in the management of general insurance companies in Nigeria.

HO2: There is no significant difference in the level of satisfaction of the Small and Medium scale Enterprises in Enugu state, about the paradigm shift in the management of general insurance companies.

LITERATURE REVIEW:

Sagagi & Ekperi & Nwadike, (2019), evaluated the awareness level of public perception of insurance companies in Enugu State. Like this study, they employed a structured questionnaire to elicit information from 400 respondents. Percentage means scores, and the Pearson Chi-Square test was used in data analysis. Findings show low awareness by the public of insurance enterprise in Enugu State, even though the city is viewed as an enlightened city. The image of insurance companies in Enugu State was also found to be poor and the demand was low, due to the poor public image of the insurance companies. The study thus recommends among others that insurance companies should engage in trade fairs, workshops, radio/TV jingles, etc. as this will serve as effective communication strategies to enlighten the public on their products and services.

Ime, (2018) studied ‘Empirical Appraisal of Nigerian Insurance Sector and the Performance of Nigerian Stock Exchange, to appraise the Nigerian insurance sector and the performance of the Nigerian stock exchange. Like the current study, he adopted an ex-post facto research design and historical data, the study covered the period 1981 to 2014 and covered all the quoted insurance firms on the Nigerian Stock Exchange operating in Nigeria. The findings reveal there is a significant relationship between insurance companies’ investments and the all-share index of the Nigerian Stock Exchange, also there is no positive effect of stock/securities prices of insurance companies on the market capitalization of the stock market and the Insurance sector growth has a significant influence on the performance of Nigerian Stock Exchange.

Li & Li (2020), analyzed the relationship between inflation, increase in investment in fixed assets, monetary policy, financial openness, national savings, macro-economic climate index, deposit rate, and the development of the insurance industry in China. Though this study was carried out in China, the analysis, unlike the current study integrated a multiple linear regression, stepwise regression, and robustness analysis for the empirical analysis. However, the result indicated that (a) the national savings and macro-economic climate index are the major factors that influence the development of the insurance industry in China and; (b) improve the development of the insurance industry, both the economic growth and people’s income should continue to advance; and (c) financial openness should be paid more attention to, which is insufficient, and there is lack of competitive vitality in the whole insurance market, underscores to need for the insurance companies in Nigeria to carry along the SMEs in their services and development for economic growth of the people of Enugu state.

Ajemunigbohun & Ayobami (2018), investigated ‘Insurance awareness and acceptance: Empirical evidence among SMEs in the Lagos State. The relationship between this study and the current one lies in the fact that both studied SMEs and employed the descriptive approach and survey design, stage cluster sampling technique, questionnaire, and interview schedule on awareness and its acceptability among small business and medium-sized operators in the Lagos and Enugu metropolis respectively. The results of this study assume that insurance products have not gained high popularity among small business and medium-sized operators in the Lagos metropolis. They have also shown a low but slightly positive relationship between insurance awareness and its acceptance among small business owners in the Lagos metropolis. Our formulated hypotheses have been supported. This study’s recommendation that greater attention should be placed on SMEs and their engagement in the design of insurance products related to their activities to allow for a sense of ownership, effective risk management communication, and proper risk financing techniques, throws a challenge on the present study conducted six years after this one, to find out if the situation has changed in Enugu State.

Although these studies are in one way or the other related to the current study, no study known to the researcher investigated the Perception of New General Insurance Services in Nigeria by Small and Medium Enterprises (SMEs) in Enugu state. This study is the first of its kind to explore the perception of the paradigm shift in insurance services in Nigeria by Small and Medium Enterprises (SMEs). This is the lacuna this study filled.

RESEARCH METHODOLOGY:

Design of the Study: This study adopted a descriptive non-experimental research design carried out ex-post facto or retrospectively, ‘looking backward. This implies ‘after the fact’ because according to (Nwankwo and Emunemu 2015:147),

Like all designs, non-experimental research design does not attempt to control or manipulate any variable. It is focused on one single event (i.e., a single case design) and the researcher’s interest or objective is to investigate and report what has happened.

This design is deemed appropriate for this study as it investigated what had already occurred with the SMEs. Hdv’s study dealt with those SMEs that existed before and after the establishment of NAICOM and so must have experienced the insurance companies’ services and products before and after the paradigm shift in administration.

Area of the Study: The area of this study is the state of Enugu. Enugu state is in the South-East of Nigeria with three senatorial zones, Enugu East, Enugu West, and Enugu North. The zone has a total of 911 SMEs (NBS 2020), Most of the residents in the zone are public servants. The people are a core Igbo-speaking race known for their business acumen. Like other parts of Nigeria NAICOM supervises the insurance companies in the state and the new changes also are being implemented in Enugu state.

The study’s population includes all the 911 registered SMEs in Enugu state (Source: NBS 2020).

Sample and Sampling Techniques: The study adopted Krejci & Morgan 1970) and Chiaha (2023) determinants of a sample size from a given population. Using a purposive, accidental, and snowballing sampling technique 30% (273) of the SMEs were used for this study. Due to the smallness of the sample, the entire state was used. Purposively, SMEs that existed before and after the establishment of NAICOM were sampled. For snowballing, available SMEs were requested to supply the names and phone numbers of their colleagues which the researcher and her assistants used to contact them. In the end, 265 SMEs were used for the study.

Instruments for Data Collection: Two instruments were used for data collection including a questionnaire titled ‘New General Insurance Services Awareness and Perception-SMEs Questionnaire (NGISAP–SMEsQ) and an interview schedule titled ‘‘New General Insurance Service Awareness and Perception – SMEs Interview Schedule (NGISAP–SMEsQ).

The NGISAP–SMEsQ is structured on a 4-point Likert-type rating scale with options of; VA- Very much Aware; NA- Not aware; UA- Unaware; VUA- Very much Aware

Or SA- Strongly Disagree; A- Agree; N- Neutral; D-Disagree; SD – Strongly Disagree and VS- Very Satisfied; S- Satisfied; NS- Not Satisfied; VUS- Very Unsatisfied where applicable; and weighted 4, 3, 2 and 1 respectively. It has two sections, A and B. Section A, with 2 items was designed to collect respondents’ demographics, while Section B with three clusters and 23 items aimed at collecting data for the research questions.

Validation of the Instrument: Three experts were requested to ascertain the appropriateness and clarity of the instruments’ items to determine whether they measured what they purported to measure. Their comments, suggestions, and observations were considered in the production of the final draft of the instruments (App II and III).

Reliability of the Instrument: The instruments were trial tested through a pilot study, on 10 respondents (SMEs) from Ebonyi state, which is outside the study area. The internal consistency of the instrument was computed using the Cronbach Alpha method which yielded 0.79 for the entire instruments. The instruments were therefore considered reliable enough for the study.

Method of Data Collection: The study adopted a direct contact administration strategy in which the researcher with her well-trained research assistants directly collected the data from the respondents. The researcher personally interviewed 25 Chief Executive Officers (CEOs) of the SMEs in their offices. The data administration lasted for two weeks with a high return rate of 78.87%

Method of Data Analysis: The data generated for the study were analyzed using percentages, means, and Standard Deviation (SD) for data collected from the questionnaire. Decisions were arrived at using the criterion mean score of 2.50. This implies that Means below 2.50 were taken indicate that the corresponding items were NOT Accepted by the SMEs, while Means of 2.50 and above were taken to indicate that the corresponding items were Accepted for the same reason.

Inference

The results from the SMEs Interview Schedule (NGISAP–SMEsQ were qualitatively analyzed. For the hypotheses testing, the Independent Sample Test of Levene’s Test for Equality of Variances was adopted in the t-test for Equality of Means at a 95% level of probability or 0.05 level of significance. The significant level was determined with the P- P-table value about the. This implies that when the P-value is below 0.05 level of significance, when t- calculated is greater than t- table (1.96) it implies a significant difference between the Means tested, thus the Null Hypotheses were Not Accepted. On the other hand, when the P-value is higher than 0.05 or the t- calculated is greater than the t-table (1.96), it implies No Significant D

between the means tested. Therefore, the Null Hypotheses was Accepted.

RESULTS:

The findings of the study are presented in four tables with the research questions and hypotheses based on the research questions and null hypotheses that guided the study. The data analyses were based on 209 copies of the questionnaire collected after completion, out 265 copies distributed. This represents the return rate.

Table 1:

Mean Ratings and Standard Deviations of Respondents on the Level of Awareness of SMEs in Enugu State on the Paradigm Shift in the Management of General Insurance Companies in Nigeria.

S/NLevel of  awareness of  the new changes in Small Businesses Include:Small Business N = 113  Medium Business N = 96Overall N = 209
XSDDec.XSDXDec.XDec.
1.Insurance companies are now managed by professional2.34  1.25  NA  2.64  1.21  NA  2.47  1.24  NA  
2.The  new  regulatory  board  Governing  body  the Nigerian Insurance Commission- NAICOM2.371.23NA2.401.31NA2.381.27 A
3.The   primary   functions   of   NAICOM  include Protecting policyholders’ interests2.501.39A2.431.30NA2.46           1.34NA
4.The  primary  functions of  NAICOM  also  include2.24           1.24NA2.551.28A         2.381.27NA
5.Insurance companies have services and products that can help protect losses in your businesses                                       2.42                                       1.29                                        NA2.631.22NA2.63      1.221.22A2.511.26A
6.Are you aware that claims are now easily paid by Insurance companies.2.49       1.23NA2.701.22A2.58        1.23A
Are you aware of the following insurance service products in Nigeria;
7.Life insurance-Paying benefits to death2.581.20A2.46    1.21NA2.531.21A
8.Health Insurance- which covers medical  healthcare costs;2.521.30A2.40    1.29NA2.46        1.29NA
9.Property  Insurance,  which  includes  losses to property, such as homes or cars;2.391.36NA2.33    1.25NA2.36        1.31NA
10.Liability  Insurance  that  covers  legal  damages or injuries caused to others2.581.20A2.48    1.34NA2.531.26A
11.Business Insurance, which covers businesses various risks, such as property damage or employee injuries2.441.28NA2.39    1.28NA2.42        1.28NA
Cluster Mean/SD                                     2.44     1.27          NA            2.49       1.26         NA            2.46       1.27      NA

NB: SD= Standard Deviation, A= Aware, NA= Not Aware, Dec = Decision

Research Question One: What is the level of awareness of SMEs in Enugu state on the paradigm shift in the management of general insurance companies in Nigeria?

Table 1 shows that the mean scores of the small businesses on items number 3, 7, 8, and 10 are 2.50, 2.58, 2.52, and 2.58. This depicts that the small businesses are Aware of the indicated new changes in the management of insurance companies in Nigeria, while items number 1, 2, 4, 5, 6, 9, and 11 with mean scores below 2.50 denotes that the same respondents are Not Aware of listed new changes in the management of insurance companies in Nigeria. Hence, the study also indicated that the mean scores of 2.64, 2.55, 2.63, and 2.70 are obtained for the medium businesses on items number 1, 4, 5, and 6, indicating that the medium enterprises are Aware of concerned new changes in the management of insurance companies in Nigeria, while items number 2, 3, 7, 8, 9, 10 and 11, with mean score range of 2.33 to 2.48 denotes Not Aware responses by the same medium businesses. However, the overall mean scores ranged from 2.51 to 2.53 for Aware and

2.38 to 2.47 for Not Aware responses respectively. Thus, the cluster mean score of 2.46 obtained for all the items under study depicts that the respondents (both small and medium businesses) are Not Aware of the new changes in the management of insurance companies in Nigeria while the cluster standard deviation of 1.27 denotes homogeneity in the opinions of the respondents.

Hypothesis One: There is no significant difference in the level of awareness of the small and medium scale Enterprises in Enugu state with regard to the paradigm shift in the management of general insurance companies in Nigeria.

Table 2 shows that the t-value (t-calculated) of -0.654 is obtained at a 0.05 significance level and 207 Degrees of Freedom with a significant value of 0.514. Thus, since the significance value (0.514) is more than the level of significance (0.05) set for the study, the null hypothesis is therefore not statistically significant, and hence, the hypothesis is Accepted. This implies that there is no significant difference in the level of awareness of the small and medium scale Enterprises in Enugu state about the paradigm shift in the management of general insurance companies in Nigeria.

Table 2:

GroupNMeanSDt-ValueDft-CalSig. (2 tailed)Dec
Small Business Owners1132.440.571.96207 0.67Accept HO
Medium Business Owners962.460.48     

t-test Statistics on the Significant Difference in the Level of Awareness of the Small and Medium Scale Enterprises in Enugu State with regards to the Paradigm shift in the Management General Insurance Companies in Nigeria.

NB: SD= Standard Deviation, Df= Degree of Freedom

Research Question Two: What is the level of satisfaction of the SMEs in Enugu with the paradigm shift in the management of general insurance companies in Nigeria?

Table 3 shows that the mean scores of the small businesses on items number 12, 16, and 19 are 2.69, 2.58, and 2.61. This depicts that the small businesses are Satisfied with insurance companies in terms of the listed items while items number 13, 14, 15, 17, and 18 with mean scores ranging from 2.34 to 2. 46 (below the 2.50 criterion mean), indicate that the same respondents are Not Satisfied with insurance companies in terms of the concerned items. Thus, the study also shows that the mean scores of 2.56, 2.57, 2.64, and 2.60 are obtained for the medium businesses on items number 12, 13, 16, and 18, indicating that the medium business owners are Satisfied with insurance companies concerning the listed items while items number 14, 15, 17 and 19 with a mean score range of

2.24 to 2.48 denotes that medium business enterprises are Not Satisfied with the paradigm shift in the management of general insurance companies in Nigeria.

The table also shows the level of willingness of the SMEs to patronize insurance companies in Nigeria. The mean score range of 1.86 to 2.46 for both SMEs indicates that they are Not Willing to patronize insurance companies in Nigeria. The cluster mean score of 2.43 and 2.41 respectively, obtained for the SMEs, show that they are Not Satisfied. Also, an overall cluster mean score of 2.42 obtained for all the items denotes that the SMEs are not satisfied with the paradigm shift in the management of general insurance companies in Nigeria. The cluster standard deviation of 1.27 depicts that the disparity in the opinions of the respondents is slim.

Table 3:

Level of satisfaction of the SMEs in Enugu with the Paradigm shift in the management of general insurance companies in Nigeria

S/NHow satisfied are you with insurance companies in terms of:Small Business N = 113  Medium Business N = 96Overall N = 209
XSDDec.XSDXDec.XDec.
12Understanding of the demographics that is needs, and preferences of SMEs and potential customers2.691.19S2.561.28S2.631.23S
13.Unique benefits and features of imsuranceproducts2.341.29NS2.571.24S2.441.27NS
14.Efforts to build a strong brand identity to establish trust and credibility of SMEs and customers2.341.27NS2.391.34NS2.361.30NS
15.Insurance companies use of online channels, such as social media, email and search engine, in communicating with the SMEs and customers2.461.11NS2.481.23NS2.471.16NS
16.Insurance companies creation of informative and engaging contents to educate and attract customers2.581.27S2.641.27S2.611.27S
17Insurance companies’ sales strategies for developing effective sales technique to convert leads into customers2.391.28NS2.241.38NS2.321.33NS
18.Insurance companies’ efforts in building strong relationships to retain existing customers and encourage loyalty2.431.22NS2.601.27S2.511.24NS
19.Insurance companies’ efforts to ensure that marketing efforts comply with industry regulations and laws2.611.22S2.261.36NS2.451.29NS
Your willingness to patronize insurance companies in Nigeria:
20.I am willing to Patronise insurance companises in Nigeria2.381.23NW2.461.26NW2.241.24NW
21.I have already insured my business2.381.26NW2.441.32NW2.411.29NW
22.My  business had previously benefitted from the services and products of insurance companies in Nigeria2.451.30NW2.411.23NW2.431.26NW
23.I am willing to encourage my colleagues in SMEs to patronize insurance companies in Nigeria.2.071.31NW1.861.32NW1.981.31NW
 
Cluster Mean/SD                                     2.44     1.27          NA            2.49       1.26         NA            2.46       1.27      NA

NB: SD= Standard Deviation, S= Satisfied, NS= Not Satisfied. D= Disagree; Dec = Decision; NW = Not Willing

Hypothesis Two: There is no significant difference in the level of satisfaction of the small and medium scale Enterprises in Enugu state, with regard to the paradigm shift in the management of general insurance companies.

The data presented in Table 4 shows that the t-value of 0.283 is obtained at a 0.05 significance level and 207 Degrees of freedom with a significant value of 0.777. Hence, since the significance value is more than the level of significance set for the study, the null hypothesis is therefore statistically insignificant and, not rejected for the said items. There is, therefore, no significant difference in the level of satisfaction of the small and medium-scale Enterprises in Enugu state, concerning the paradigm shift in the management of general insurance companies. The hypothesis is upheld.

Table 4:

t-test Statistics on the Significant Difference in the Level of Awareness of the Small and Medium Scale Enterprises in Enugu State with regards to the Paradigm shift in the Management General Insurance Companies in Nigeria.

GroupNMeanSDt-valueDft-CalSig. (2 tailed)Dec
Small Business Owners1132.430.450.283207 0.777Accept HO
Medium Business Owners962.410.47     

NB: SD= Standard Deviation, Df= Degree of Freedom

Results from the SMEs Interview Schedule (NGISAP–SMEsQ :

Research Question 1: What is the level of awareness of SMEs in Enugu state on the paradigm shift in the management of general insurance companies?The CEOs of the SMEs interviewed indicated that they were not aware of the paradigm shift in the management of new general insurance companies in Nigeria. Most of them showed that they were not interested in their services as they did not benefit from the insurance companies that they wanted. They complained of delays and bottlenecks which make payment difficult and mostly impossible when it comes to claims. However, many confessed that they do not attend the NAICOM conferences and Briefs as they ‘do not have much time to waste due to their businesses’.

Research Question 2: What is the level of satisfaction of the SMEs in Enugu with the paradigm shift in the management of general insurance companies?

On the issue of satisfaction with the paradigm shift in the management of general insurance companies, the CEOs were very emphatic that they were not satisfied with the services in the insurance companies. Their lack of satisfaction is because the insurance companies cannot be trusted. They also indicate the Unwillingness to patronize the insurance companies, rather they would prefer to support their thrift system managed by the SMEs, even though they accept that they are aware that they can benefit more insurance companies.

Summary of Findings:

Research Question 1: What is the level of awareness of SMEs in Enugu state on the paradigm shift in the management of general insurance companies in Nigeria?

Finding 1: The SMEs in Enugu state are Not Aware of the paradigm shift in the management of general insurance companies in Nigeria.

Hypotheses 1: There is no significant difference in the level of awareness of the Small and Medium scale Enterprises in Enugu state with regards to the paradigm shift in the management of general insurance companies in Nigeria.

Finding 2: There is no significant difference in the level of awareness of the Small and Medium scale Enterprises in Enugu state with regard to the paradigm shift in the management of general insurance companies in Nigeria.

Research Question 2: What is the level of satisfaction of the SMEs in Enugu with the paradigm shift in the management of general insurance companies in Nigeria?

Finding 3: The SMEs in Enugu state are Not Satisfied with the paradigm shift in the management of general insurance companies in Nigeria and are Not Willing to patronize insurance companies in Nigeria.

Hypotheses 2: There is no significant difference in the level of satisfaction of the Small and Medium scale Enterprises in Enugu state, with regards to the paradigm shift in the management of general insurance companies.Finding 4: There is no significant difference in the level of satisfaction of the Small and Medium scale Enterprises in Enugu state, with regard to the paradigm shift in the management of general insurance companies.

DISCUSSIONS: The findings of this study are discussed in line with the specific objectives and hypotheses that guided the study.

SMES Level of Awareness of the Paradigm Shift in the Management of General Insurance Companies in Nigeria:

The findings show that the SMEs in Enugu state are Not Aware of the paradigm shift in the management of general insurance companies in Nigeria. This is quite disturbing as the SMEs are the engine for economic development in the state. There is no significant difference in the level of awareness and satisfaction of the Small and Medium scale Enterprises in Enugu state, concerning the paradigm shift in the management of general insurance companies indicating that both small and medium-scale enterprises have the same opinion. Not being aware of the paradigm shift in the management of general insurance companies in Nigeria implies that they may not take advantage of the services of the insurance companies to enable them to protect their businesses. The response of the CEOs from the interview shows that the SMEs do not even attend the NAICOM conferences and Briefs as they ‘do not have much time’.

It is therefore not surprising that they are unaware of the paradigm shift in the new management of general insurance companies. Their biases are due to the previous management’s compromise with the payment of claims which have overclouded their reasonings.

This finding supports Ajemunigbohun & Ayobami (2018), that insurance products have not gained high popularity among small businesses and medium-sized operators in the Lagos metropolis. It is surprising to find that even after five years of the findings of Sagagi, Ekperi & Nwadike, (2019), indicating low awareness by the public of insurance enterprise in Enugu State, the findings of this study show that nothing changed, as the SMEs in Enugu state are still unaware of the new paradigm shift. This implies that the SMEs are unaware of the improvements and innovations introduced by NIACOM. Like Sagagi, Ekperi & Nwadike, (2019), who found low demand and patronage of insurance products and services in the Enugu state, this study also found that the SMEs in Enugu state are not satisfied and therefore unwilling to patronize the insurance companies in Nigeria. Probably NIACOM is emphasizing institutions, which have less and minimal risks, with little or no advocacy for the SMEs that have higher risks. Probably this is why the SMEs formed their local insurance, which they prefer to patronize even when the local insurance does not have as many benefits as that of NAICOM.

Conclusion: The study concludes that SMEs in Enugu state are not aware of the paradigm shift in the new management of the general insurance companies in Nigeria and are not satisfied nor willing to patronize them.

Implications of the study:

  1. SMEs are very beneficial to the economic growth of Nigeria and if they are not protected from risks, many will fold up and it will affect the country’s economy drastically, so NAICOM must ensure that they are properly educated to benefit from the risk management of the insurance companies.
  • NAICOM should note that as long as the SMEs are not aware of the paradigm shift in the new management of the general insurance companies in Nigeria, they may not be satisfied nor willing to patronize them, so making the SMEs aware of the paradigm shift in the new management of the general insurance companies is very paramount in getting their satisfaction and patronage.

Contribution to Knowledge: This study has made significant contributions to knowledge.

  1. The SMEs are not properly insured in Enugu state and therefore the study shows that many of the SMEs may be at risk of folding up.
  2. It has shown the need for advocacy to enable the SMEs to benefit from the products and services of NAICOM.
  3. It has contributed to the literature and will be helpful to researchers carrying out similar studies in this area.

Suggestions for Further Studies: Studies should be carried out to find the reasons for the continued low patronage of insurance companies in Nigeria in Enugu and other states in Nigeria. And how to improve advocacy for the public, especially the SMEs.

RECOMMENDATIONS:

  1. NAICOM must endeavor to sensitize SMEs in Enugu to become aware of their services as well as the paradigm shift in the new management of the general insurance companies in Nigeria. This will enable the SMEs to patronize them.
  • The insurance companies in Nigeria should ensure that they settle the claims for their customers promptly by avoiding bottlenecks and delays.
  • NIACOM should pay more attention to small and medium business owners, and educate them on the paradigm shift introduced by the new management and other products and activities for the insurance companies. This is because of the importance of the SMEs in promoting economic development in Nigeria.
  • NIACOM should understudy the local insurance of the SMEs to find out why they prefer to patronize it and learn from it how to attract the SMEs.

PERCEPTION OF NEW GENERAL INSURANCE SERVICES IN NIGERIA BY SMALL AND MEDIUM ENTERPRISES (SMEs) IN ENUGU STATE Read More »

CUSTOMER BEHAVIOUR AND SUSTAINABLEBUSINESS PRACTICES: CASE OF BREADINDUSTRIES IN AWKA, ANAMBRA STATE.

By
OBIALO THEOPHILUS CHINONSO
CHUKWUDI SOLOMON NGODO

MASTERS OF BUSINESS ADMINISTRATION
+2340703 076 3076
obialotc@gmail.com
07039420918
chukwudisolomonngodo@gmail.com
2024

ABSTRACT:

Bread has become a staple food in Nigeria since its first introduction into Nigeria in the 1920s.  However, the current harsh economic hardship in the country has made it unaffordable. Thus, the sustainability of the industry comes on the mark. This study examines sustainable business practices in bread industries in Awka that influence customer behaviors.  A descriptive survey research design was used. Three research questions and three hypotheses guided the study. The population consists of 200 bakeries. The instruments were a questionnaire and a Focus Group Discussion. Data was analyzed using means, Standard Deviation, and Analysis of Variance (ANOVA). The results reveal that sustainable practices of bread manufacturers that promote and sustain customers’ interests include online marketing, direct sales to consumers, and adding more ingredients to increase the quantity and quality of the bread, which sustain customers’ purchasing decisions to a Large Extent. Also, there is no significant difference among male and female; old and new bread manufacturers in this regard. The study concludes that the business practices of bread manufacturers sustain customer behaviors in Awka. Recommendations include government efforts to reduce the problems of foreign exchange, the high cost of imported and local materials, and manufacturers’ promotion of supply chain management.

Key Words: Customer Behaviour; Sustainability; Business Practices; Bread Industries, Supply Chain Management; Innovation.

INTRODUCTION:

Background of Study: 

The customer is a very important factor in every business, that has the satisfaction of the customers as its major objective, to maximize production and profit. Consequently, consumer behavior becomes a very crucial aspect of consideration in business sustainability. Sustainability is the ability to continue over a long period, despite difficulties encountered by organizations and businesses. It requires the use of natural resources for long-term usage. It also implies withstanding difficulties and challenges. United Nations Brundtland Commission in 1987, defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Sustainability in business refers to using durable materials in the manufacturing process. It is broadly used to indicate programs, initiatives, and actions aimed at preserving particular resources; this refers to four distinct areas, which are human, social, economic, and environmental–known as the four pillars of sustainability. 

Three important well-known accepted businesses are the triple bottom line of sustainable business, called the three P’ (https://www.futurelearn.com › sustainable-business › steps). Sustainability has the role of protecting and maximizing the benefit of the 3Ps- People, Planet, and Profit. In this study, the researcher is interested in the first ‘P’ of the People.Sustainability, in this regard, indicates the initiatives employed by businessmen and women to preserve their businesses for a very long period. Four distinct areas: human, social, economic, and environmental, known as the four pillars of sustainability are concerned (https://www.futurelearn.com ›sustainable-business› steps) in attaining sustainability in businesses. This involves sourcing sustainable ingredients, using packaging solutions and resources mindfully, with eco-friendly practices (….. 2024)

              Sustainability has become very imperative due to the high costs of production and customers; and increased demand for satisfaction, which have resulted in businesses seeking competitive advantages. Thus, industrialists and researchers are always searching for ways to overcome these threats, leading to the emergence of supply chain management, referred to as all activities undertaken to deliver products and services to customers from sourcing of raw materials to the delivery of the products and services to the final consumer, (Sukati, Baharun, & Said, 2011 in Kehinde, 2023). This is the essence of this study which aims to investigate Customer behavior and sustainable business practices: the case of bread industries in Awka, Anambra state.

   Bread has become a staple food in Nigeria ever since its first introduction.  History has it that it was introduced in Nigeria in the nineteenth century by freed slaves returning to Lagos from Brazil (Okafor, 2010). However, commercial baking began in about the 1920s, due to technical innovations introduced by the bread king, Amos Shackleford who introduced a kneading device known as dough brake and the wholesale system.  The growth of the bread business in Nigeria was aided by African Home and Foreign industries, Sterling Brothers Baking Company, (Okafor, 2010). Since the industry has continued to grow. Apart from being taken as breakfast in many homes, bread is a gift item, which is purchased for children and even adults as a gift after a trip. However, the bread industry, which is one of the largest food processing industries in the country, with bread and biscuit (referred to as ‘moist and dry’ outputs respectively) accounting for 82 percent of their outputs, (Kehinde, 2023). Recently, bread manufacturers have been facing challenges with high levels of competition (Onwumere et al., (2012) thus, requiring a sustainable practice for survival.

Statement of the Problem:

Economic and food crises in Nigeria also affected the bread industry, especially in Awka, with the rising cost of raw materials due to the steady increase of foreign exchange in the past few years. Njoku & Kalu (2015), observed that low profit margins as a result of high cost of production, infrastructural deficit, high operation cost, exchange rate volatility, and stiff competition also bedevil the industry. Njoku & Kalu, (2015), also pointed out that flour, a byproduct, (97% wheat), the main raw material used for the production of Bread in Nigeria, is imported. Consequently, some bakeries fizzle out within a short period of their establishment (Onwumere, Nwosu & Nmesirionye 2012). This scenario suggests that all is not well in the industry lamented (Kehinde, 2023), especially in Awka, which is the capital of Anambra state, where dwellers thrive mostly on businesses for survival.Bread baking has continued to increase probably due to an increase in bread consumption in the state.  However, the industry is dominated by small-scale bakers who find it difficult to source foreign exchange for their bakeries, thus sustainability of the industry becomes imperative. The purpose of this study is to explore sustainability business practices in bread industries, that influence customer behaviors in Awka in Anambra state.

Research Questions:

The following research questions guided this study;

  1.  What sustainable practices are adopted by bread manufacturers to promote customers’ purchasing interests in Awka?
  2.  What strategies adopted by manufacturers in Awka, sustain customers’ interest in bread purchasing?
  3. To what extent do the business practices of bread manufacturers sustain customers’ purchasing decisions in Awka?

Hypotheses:

The following hypotheses were tested at 0.05 level of significance, to guide the study.

HO1: There is no significant difference between male and female; old and new Bread respondents on how sustainable practices promote customers’ purchasing interests in Awka.

HO2: There is no significant difference between male and female; old and new bread respondents, on the strategies adopted by manufacturers that sustain customers’ interest in bread industries in Awka.

HO3: There is no significant difference between male and female; old and new Bread respondents on the extent the business practices in bread industries influence customers’ purchasing decisions.

REVIEW OF LITERATURE: Literature was reviewed under conceptual, theoretical frameworks, and empirical studies.

Conceptual framework: The study is framed on the following according to the variables:

Concept of customer behavior: Consumer behavior is an important topic in business practices and is concerned with consumers’ decision-making process in acquiring, consuming, and adopting the needed products and services.  Consumer Behaviour, often referred to as consumer buying behavior has to do with buying products or services for one’s personal use or consumption, (Olaide, 2023). This action is usually influenced by a lot of factors. According to the American Marketing Association (AMA), Consumer behavior is the dynamic interaction of cognition, behavior, and environmental events by which human beings conduct the exchange aspect of their lives. As much as consumers’ behavior is important in marketing activities, their emotional state determines their buying behaviors (Ajayi,2019). This is probably why Oladele (2019), conceived consumer behavior as a multi-disciplinary subject, which examines the decision process in the form of activities of consumers in their consummation roles. This study adopted the concept that Consumer behavior implies how customers select, buy, use, and dispose of ideas, goods, and services to satisfy their needs and wants (Manuere, Chikazhe and  Josphat, 2022). In this case, it is about individuals selecting, and using their ideas to purchase bread for consumption or retailing.

Concept of Sustainability: There are several concepts of sustainability depending on the perception of the author, for instance, Kuhlman & Farrington (2010) perceive sustainability as encompassing three dimensions, social, economic, and environmental. This study conceives sustainability as the ability to withstand difficulties and survive amid challenges.

Theoretical framework: Theoretical Framework: This study is framed on the following consumer behavior theoretical models as follows; Factors That Influence Consumer Behaviour and Maslow’s Theory of Motivation.

  • Factors That Influence Consumer Behaviour: Customers are the main reasons for the existence and continuity of all businesses globally. Wandera & Sharma (2018), identified internal and external factors that mainly influence consumer behaviors before, during, and after purchases. Internal Factors are factors that result from different dimensions within the context of the consumer in the area of culture, and personal aspects as well as customer loyalty which have influences on consumer behaviors, such as culture, and customer loyalty. External factors are those beyond the consumer’s control regarding decisions on the products and services.  However, such changes can result due to society’s needs through, social media, crisis, and motivational impacts. This study on customer behavior and sustainable business practices: the case of bread industries recognizes the role of the external and internal factors in sustaining customers’ interest in sustainability in the bread industry and will articulate them in this study.
  • Maslow’s Theory of Motivation: propounded by Abraham Maslow (1943), in his paper, titled “A Theory of Human Motivation,” points out that human actions are motivated by certain psychological and physiological needs that progress from basic to complex, in a hierarchical order needs as follows; Basic physiological Needs, which trigger the consumer to buy food, drinks, and other consumable food to remove hunger and thirst;  Safety Needs, which results after satisfying the above needs, the consumer becomes concerned about his safety, security, and stability; Love/Social Needs: The consumer will seek for love and try to be identified with a group; Esteem/Ego Needs: This makes the consumer buy luxury or exotic products as a sign of success and prestige and Self-Actualization: this leads to the consumers’ personal development and individuality.

           This study appreciates that the marketing concept is all about needs, therefore, it is important to

explore the dynamics that the consumer needs bread, thus the changes in their behaviors towards continued and increased demand for bread, despite the fight for sustainability of the industry is the concern of this study.

Empirical Studies:  Empirical studies reviewed include, Studies on Consumer Behaviour, Studies on Sustainability, and Studies in Bread manufacturing business.

  • Studies on Consumer Behaviour

Latuszynska, Furaiji & Wawrzyniak, (2012) study, ‘An Empirical Study of Factors Influencing Consumer Behaviour in Electric Appliances Market aimed to determine the factors affecting consumer preferences and behaviour in the electric appliances market in Iraq. The data obtained from the questionnaire was analyzed. The major findings of the study indicated that, overall, the set of independent variables is weakly associated with the dependent variable. However, the in-depth analysis found that social factors, physical factors, and marketing mix elements are strongly associated with consumer buying behavior.

            Koyluoglu, (2022), ‘An Empirical Study of the Effect of Online Comments on Consumer Buying Behavior’ was carried out at Selcuk University with a random sampling method using a Google survey to select 400 participants, including academics, university staff, and students. The SPSS 22.0 program was used in the analysis of the collected data. Pearson correlation and multiple regression analyses were used because the scale used in the study was a normal distribution and parametric tests were used. As a result, it was observed that as the positive perspective of the participants on consumer comments increased, buying behavior also increased. However, no significant relationship was found between attitude toward comments and buying behavior (p>0.05).

             Manuere, Chikazhe and Josphat, (2022). In their ‘Theoretical models of consumer behavior: A literature review,’ presented the evolution of theories that have uniquely influenced consumer buying decision processes. Marketers use theories of consumer behavior to explain how consumers behave and to segment the market for consumers. Marketers use several theories of consumer behavior, namely, traditional theories and contemporary theories. Traditional theories are based on economic principles or experiences of marketers, whereas modern theories are associated with empirical results. The theory of consumer behavior is an explanation of facts in an orderly manner. However, not all theories of consumer behavior are good or sound. A sound theory of consumer behavior describes both behavior and the nature of the behavior. Thus, consumer behavior theories are used to understand and predict the behavior of consumers. To that end, this study used two important groups of theories, namely, the Buyer Behaviour theory and the theories of reasoned action. These theories will help us to research different aspects of consumer behavior. Therefore the strengths and weaknesses of these theories are documented.

Studies on Sustainability:

              Rev. UFSM, Naline, Zanin, Dalmutt, and Magro, (2022), aim to examine the efficiency of sustainability practices in industries in Chapecó-Santa Catarina. The research employed a descriptive, conducted through a survey with 63 companies. The questionnaires administered show the perception of top managers concerning the economic-financial, social, and environmental dimensions. A quantitative approach and information entropy analysis were used with ranking by TOPSIS. The study shows that companies have not yet realized that natural resources are scarce, and their leaders are not committed to sustainable management, which would provide evidence of the efficiency of business practices with sustainable development.

                Iheanachor, (2021). investigates the sustainable business practices of Nigerian organizations, to examine sustainability practices of businesses from selected industries; construction, manufacturing, banking, and hospitality – were selected based on the availability of sustainability reports of industry leaders. This research aims to help business managers and policymakers understand sustainable business practices and their implications on business performance. This study is related to the current research in the fact that both investigated sustainable business practices of Nigerian organizations, aiming at helping business managers and policymakers understand sustainable business practices and their implications on business performance but while this study focused on banking and hospitality industries, mine dwelt on bread industries to discover how and the impact on customer behavior. 

              Hang, Nguyet, Nguyen, and Tognetti, (2018), Thesis aims to understand and assess how companies integrate sustainability thinking through sustainable business practices and customers’ engagement in the Swedish coffee industry. Using a qualitative research method, a case study of Löfbergs, including interviews with managers, customers, focus groups with young consumers, and observations at Löfbergs’ Café Bar, they found that the company places sustainability at the center of its business strategy. If a business succeeds in integrating sustainable thinking into its business practices, the results are higher engagement both on the customers’ and stakeholders’ sides. The study concluded that by shifting to transcendence as a business logic, the business can adopt a dialectic strategy and successfully integrate sustainability into its business practices. This study just like the current one is focused on integrating sustainability thinking through sustainable business practices and customer engagement; the current one deals only with customer behavior and sustainable business practices: in bread industries, again this study fixated on the Swedish coffee industry, while the current study area is in Awka, Anambra state. Nevertheless, both employed the same qualitative research method and a case study approach with interviews and focus group discussions. Although my study did not use interviews it adopted the use of questionnaires and focus group discussion.

           Olaide, (2023) research focused on the impact of consumer behavior on sustainable development goals (goal 12) of the United Nations. It further investigates the consequent effects of consumer behavior on sustainable development. Data from this study were collected from 80 respondents through questionnaires and analyzed using the Pearson Product Moment Correlation and Statistical Packages for Social Sciences. Sustainable consumption practices were found to have a significant impact on sustainable development goals, the findings also support a positive influence of sustainable consumption reducing the absorption of natural resources and minimizing wastes of such resources. The study advocates implications for organizations regarding strengthening the practice of sustainable consumption to achieve sustainable development in society. Olaide, 2023 research is quite relevant to this study; but, unlike the current study, it focused on the impact of consumer behavior on the United Nations’ sustainable development goals, different from customer behavior and sustainable business practices, which the current study investigated. However, the instruments and data collection methods were similar.

             Mande & Taofeek (2022), studied ‘Effect of Consumer Behaviour on Sustainable Development (A Case Study of Unilever Nigeria Plc)’ using a descriptive research design as it required seeing and reporting employee behavior, attitudes, and activities as they were at the time of the study. The research was limited to a survey of  Unilever Nigeria plc. A sample size of 80 was obtained from the 100 questionnaires distributed. The primary source of data was adopted using questionnaire items. Pearson Product Moment correlation analysis with statistical packages for social sciences (SPSS) was used. Results show no significant relationship between consumer behavior and sustainable development but a significant relationship between consumer behavior and sustainable development and a significant relationship between consumer behavior and sustainable development. Also, consumer behavior influences sustainable development. The study suggested marketing communication tools should be adopted by companies to create awareness about sustainable consumption and sustainable development among the consumers in society and that in making sustainable marketing activities effective and achieve their goals, different environmental cultures should be utilized on consumers of various market segments.

Studies in Bread manufacturing business:

             Ezezue et al, (2019) explored the ‘Impact of Outsourcing on Productivity in Bakery Industry, Abakaliki Metropolis’. Consumers of bread in Abakaliki Metropolis regret the soaring unit price of the product which managers attribute to the increasing cost of outsourcing which results from an inflationary economic system. Three hypotheses were formulated to measure the relationship between outsourcing and operational labor cost, reject bread manufacture, and operational time. This study was based on transaction cost economics theory. The instrument was a questionnaire, while Spearman‟s correlation was used for data analysis. Results indicate that outsourcing increases efficient production by reducing the operational labor cost and labor time while minimizing the quantity of bread rejects. It is therefore recommended that the management of the bread industry in the city should intensify outsourcing as a means of reducing the unit price of bread and promote transaction cost economics decisions for greater productivity.

             Adekoyeni and Abdulhamid (2020) in their study, ‘Feasibility and Economic Analysis of Bread Production in Gashua, Yobe State, Nigeria’ determined the viability, cost, and benefits associated with a bakery project before financial resources are allocated. The capital investment for the bakery establishment was estimated at ₦10,316,303.00 with a maximum capacity to utilize 10 bags of flour (50 kg) per day. The production capacity is to increase at 50, 60, 75, 85, and 90 mi efficiency for five years respectively. The cost of production ranged between ₦30,776,550 to 45,059,946.85 while the profit after tax ranged from ₦12,783,071 to 18,878,298.79 for five years. The noncurrent asset schedule annual depreciation was estimated at #655,000. The cash flow and breakeven point were ₦41,395,161 and 27,705 respectively. The bakery business in Gashua is worthwhile for entrepreneurs as a profit-making venture.

               Udu & Offor (2017), investigated ‘Technology Utilization and Organizational Productivity: A Study of Selected Bakery Firms in Abakaliki, Ebonyi State, Nigeria’  to examine the nature of the relationship between technology utilization and productivity of bakery firms in Abakaliki, Ebonyi State. Using a correlational survey research design they established the degree of relationship between the studied variables. A structured questionnaire was administered to the sample of 164 respondents, out of which 160 copies of the questionnaire were returned and subsequently used for the analysis. The Pearson Correlation Coefficient was used to analyze the data. The study found that there is a significant negative relationship between the utilization of spiral mixer technology and the production time of bread processing of the bakery firms in Abakaliki, there is a significant negative relationship between the utilization of rotary rack oven technology and several employees involved in bread processing firms in Abakaliki and there is a significant positive relationship between utilization of blend molding machine and the quality of output of the bakery firms in Abakaliki. The result implies that technology utilization promotes efficiency in operations which results in enhanced competitive advantage in the market. From the findings, the study recommends that bakery firms have not yet utilized modern technology in their production processes.

 Summary of Literature Reviewed:

           This study reviewed two main concepts, Consumer behaviour and Sustainability. Consumer behavior in this study was adopted (Manuere, Chikazhe, and Josphat, 2022).) concept, indicating that consumer behavior implies how customers select, buy, use, and dispose of ideas, goods, and services to satisfy their needs and wants to purchase bread for consumption or retailing, Of the several concepts of sustainability, Kuhlman & Farrington (2010) idea was adopted as encompassing three dimensions, social, economic and environmental issues. Thus, it is seen as the ability to withstand difficulties and survive amid challenges be it social, economic, or environmental. The study is also framed on the consumer behavior theoretical models of Factors That Influence Consumer Behaviour and Maslow’s Theory of Motivation. On the Empirical studies, 11 studies were reviewed including three studies on Consumer Behaviour, five studies on Sustainability, and three on Bread manufacturing business. However, out of these studies, none to the knowledge of the author is on ‘Customer Behaviour And Sustainable Business Practices: Case of Bread Industries in Awka, Anambra State.’ This is the lacuna filed by this study.

RESEARCH METHODOLOGY:                                                 

Design of the Study: This study adopted a descriptive research design. This implies ‘after the fact’ because according to (Siedlecki, 2020), it is a structured method for gathering data from a sample of a population, using different approaches such as surveys, interviews, questionnaires, and observations. to describe the characteristics, without any form of control or manipulate of any variable, which are studied in their natural settings. This design is deemed appropriate for this study as it employed questionnaires to collect data, without controlling or manipulating any variable.

Area of the Study: The area of this study is Awka, the capital of Anambra state, which is in South-East Nigeria.  The people of Awka are Igbos, known for their talent in business and industrialization.  Awka is heavily populated and thus, the bread industry has a great opportunity to survive due to the high demand. The Bread industries in Awka are having hard times and thus seeking sustainable ways of survival like other businesses in Nigeria, especially in the South East.

Population of the Study: The population of this study consists of all 200 bakeries in Awka as of October 8, 2024 (Source: https://rentechdigital.com/smartscraper/business-report-details/nigeria/anambra-state/list-of-bakeries-in-awka).

Sample and Sampling Technique:  There is no sampling as the entire population was used due to the fewness of the number.

Instruments for Data Collection: The instruments used for data collection are a questionnaire titled ‘Customers Behaviour and Sustainable Business Practices in Bread Industries Questionnaire (CBSBPBIQ) and a Focus Group Discussion.The CBSBPBIQ is structured on a 4-point Likert-type rating scale with options of; SA- Strongly Disagree; A- Agree; D-Disagree; SD – Strongly Disagree and VLE- Very Large Extent; LE- Large Extent; SE- Small Extent; VSE- Very Small Extent and weighted 4, 3, 2 and 1 respectively. It has two sections, A and B. Section A, with three items designed to collect the demographics of the respondents, while Section B with three clusters and 26 items collected data for answering the research questions. The Focus Group Discussion consists of three research questions.

 Validation of the Instrument: Three experts who validated the instrument ascertained the appropriateness and clarity of the items of the instruments to ensure the items measured what they purported to measure. Their comments, suggestions, and observations were considered in the production of the final draft of the instruments. (App I).

 Reliability of the Instrument: The questionnaire was trial tested through a pilot study on five bakeries with 20 respondents from Enugu state, outside the study area. The internal consistency of the instrument was computed using the Cronbach Alpha method which yielded 0.86 for the entire instrument, which was therefore considered reliable enough for the study.

Method of Data Collection: The study employed a face-to-face administration strategy in which the researcher with his well-trained research assistants directly collected the data from the respondents, which lasted for one week with a high return rate of 100%.  The Focus Group Discussion was conducted at the Association of Bakeries meeting at Awka. The researcher was given 25 minutes to discuss with the respondents available at the meeting. 

Method of Data Analysis: The data collected were analyzed using means and Standard Deviation. Decisions were arrived at using the criterion mean score of 2.50. This implies that Means below 2.50 were taken to indicate that the corresponding items were NOT Accepted by the respondents, while Means of 2.50 and above were taken to indicate that the corresponding items were Accepted for the same reason.

 The results from the Interview and Focus Group Discussion were qualitatively analyzed.

 For the hypotheses, for the sample over 30, according to Cleophas & Zwinderman (2016), analysis of Variance (ANOVA) or z-test should be used, whereas t-tests are most helpful with a smaller sample size below 30 (n < 30). However, both methods assume a normal distribution of the data but to them, z-tests are most useful when the standard deviation is known.

For the hypotheses’ testing Analysis of Variance (ANOVA) was adopted at 0.05 significance level.  The significance level was determined with the P- table value about the significance level. This implies that when the P-value is below 0.05 significance level, there is a Significant Difference between the tested Means; therefore, the Null Hypotheses were Not Accepted.  On the other hand, when the P-value is higher than 0.05, it implies that there is No Significant Difference between the means tested. Therefore, the Null Hypotheses was Accepted.  Research question 3 requires a test of the extent practices of bread manufacturers influence customers’ purchasing decisions, the real limits of Numbers will be used to arrive at decisions as follows;

                      3.50 – 0.05 = (VLE) Very Large Extent =

                      2.50 – 3.05 = (LE)    Large Extent 

                      1.50 – 2.05 = (SE)     Small Extent

                      0.00 – 1.05 = (VSE)  Very Small Extent 

RESULTS:

Research Question One: What sustainable practices are adopted by bread manufacturers to promote customers’ purchasing interests in Awka?

 Table 1: Mean and Standard Deviation of the Sustainable Practices of Bread Manufacturers that promote customers’ interest    N=200 
S/No                                         ItemsXSDDec 
1.Innovations like adding fruits and vegetables. 0.660. 19NA 
2.Expanding distribution channels through sales agents2.550. 44A 
3.Online marketing through social media platforms 3.420. 28A 
4.Direct sales to consumers  3.250. 52A 
5.Sales through retailers 3.420. 43A 
6.Door-to-door sales to homes, offices, and business areas3.340. 47A 
7.Giving discounts to regular customers 3.270. 50A 
8.Compromising on raw materials to reduce the quantity and quality0.740. 48NA 
9.Adding more ingredients to increase the quantity and quality3.330. 51A 
Research Question Two:  What strategies adopted by manufacturers in Awka, sustain customers’ interest in bread purchasing? Table 2: Mean and Standard Deviation of the Strategies ADOPTED by manufacturers in Awka that sustain customers’ interests in bread industries. N=200     
10.Innovations like adding fruits and vegetables1.970.36NA 
11.Expanding distribution channels through sales age2.950.43A 
12.Online marketing through social media platforms 2.800.41A 
13.Direct sales to consumers  3.140.42A 
14. Sales through retailers 3.700.45A 
15.Door-to-door sales to homes, offices, and business areas3.230.50A 
16. Giving discounts to regular customers 2.410.25NA 
17.Compromising on raw materials to reduce the quantity and quality1.200.51NA 
18.Adding more ingredients to increase the quantity and quality3.720.27A 
 Research Question Three: To what extent do the business practices of bread manufacturers sustain customers’ purchasing decisions in Awka? Table 3: Mean and Standard Deviation of the Extent the sustainable business practices in bread industries sustain customers’ purchasing decisions. N=200 
19.Innovations like adding fruits and vegetables 3.300.51LE 
20.Expanding distribution channels through sales agents3.000.36LE 
21.Online marketing through social media platforms 2.480.34SE 
22.Direct sales to consumers  3.200.51LE 
 23.              Door-to-door sales to homes, offices, and business areas3.170.48LE 
 24.                Giving discounts to regular customers 3.290.46LE 
 25.            Compromising on raw materials. to reduce the quantity and quality1.630.19SE 
 26.             Adding more ingredients to increase the quantity and quality3.390.52LE 
27.CLUSTER MEAN/ SD2.930.35LE 

Research Question One: What sustainable practices are adopted by bread manufacturers to promote customers’ purchasing interests in Awka?

Table 1 shows the mean and standard deviation of the sustainable practices of bread manufacturers that promote customers’ interest. According to the table, items 2, 3, 4, 5, 6, 7, and 9 have their means above the 2.50 criterion mean. Therefore, the table shows that the respondents Accept the following as the sustainable practices of bread manufacturers that promote customers’ interests, Expanding distribution channels through sales agents; Online marketing through social media platforms; Direct sales to consumers; Sales through retailers; Door-to-door sales to homes, offices and business areas; Giving discounts to regular customers; and Adding more ingredients to increase the quantity and quality. The standard deviation scores show homogeneity in the responses.

Results from the Focus Group Discussion: The outcome of the Focus Group Discussion with the manufacturers shows that several practices were adopted, including exploring different channels of distribution and sales such as house-to-house, online marketing, social media groups, and giving discounts. They did not accept that they compromise on the ingredients to make profits instead they claim that they add more to increase the quantity and quality. They noted that much profit is no longer made from bread production due to the high cost of raw materials, which has resulted in the closure of many industries in  Awka.  They indicated that sustainability in the business lies on y=the quantity of sales made and so efforts are made to sell as many as possible.  

Research Question Two:  What strategies adopted by manufacturers in Awka, sustain customers’ interest in bread purchasing?

Table 2 indicates the Mean and Standard Deviation of the Strategies Adopted by manufacturers in Awka that sustain customers’ interests in bread industries. According to the table, items 11, 12,13, 14, 15, and 18, have their means above 2.50 criterion mean. The table shows that the respondents Accept the following as the Strategies Adopted by manufacturers in Awka that sustain customers’ interests in bread industries; Expanding distribution channels through sales agents; Online marketing through social media platforms; Direct sales to consumers; Sales through retailers; Door-to-door sales to homes, offices and business areas; Adding more ingredients to increase the quantity and quality. The Standard Deviation scores show homogeneity in the responses.

Results from the Focus Group Discussion; To sustain customers; interest is paramount in the business, they observed. This explains why effort is made to improve the quality and quantity and expand marketing channels. Most of them convey bread to the customers with their vehicles to save them the trouble of transportation. That is why they do door-to-door sales. They also employ packaging that will not add too much cost to the bread.

Table 4: Summary of ANOVA Analysis of significant differences between male and female; old and new bread manufacturers on how sustainable practices promote customers’ purchasing interests in Awka.

Source Statical tool UsedF- RatioP-ValueLevel of SigDec
Hypothesis One: There is no significant difference between male and female; old and new Bread respondents on how sustainable practices promote customers’ purchasing interests in Awka.Analysis of variance (ANOVA)1.9470.1930.05Accept HO1
Hypothesis Two: There is no significant difference between male and female; old and new bread respondents, on the strategies adopted by manufacturers that sustain customers’ interest in bread industries in AwkaAnalysis of variance (ANOVA)1.8220.0980.05AcceptHO2
Hypothesis Three: There is no significant difference among male and female; old and new Bread respondents on the extent the business practices in bread industries influence customers’ purchasing decisions.Analysis of variance (ANOVA)1.7850.1210.05Accept HO3

Summary of Findings:

Research Question One: What sustainable practices are adopted by bread manufacturers to promote customers’ purchasing interests in Awka?

Finding One: The sustainable practices of bread manufacturers that promote customers’ interests are:  

  • Expanding distribution channels through sales agents (x=2.55)
  • Online marketing through social media platforms (x=3.42);
  • Direct sales to consumers (x=3.25);
  • Sales through retailers (x=3.42);
  • Door-to-door sales to homes, offices, and business areas (x=3.34);
  • Giving discounts to regular customers (x=3.27)
  • Adding more ingredients to increase the quantity and quality (x=3.33).    

Research Question Two:  What strategies adopted by manufacturers in Awka, sustain customers’ interest in bread purchasing?

Finding Two: Strategies Adopted by manufacturers in Awka that sustain customers’ interests in bread industries are;

  • Expanding distribution channels through sales agents (x=2.95);
  • Online marketing through social media platforms (x=2.80);
  • Direct sales to consumers (x=3.14);
  • Sales through retailers (x=3.70);
  •  Door-to-door sales to homes, offices, and business areas (x=3.23);
  • Adding more ingredients to increase the quantity and quality (x=3.72).

Research Question Three: To what extent do the business practices of bread manufacturers sustain customers’ purchasing decisions in Awka?

 Finding Three: The business practices of bread manufacturers sustain customers’ purchasing decisions in Awka to a Large Extent (2.93).

Hypothesis One: There is no significant difference between male and female; old and new Bread respondents on how sustainable practices promote customers’ purchasing interests in Awka.

Finding Four:  HO1 Accepted- There is no significant difference between male and female; old and new Bread respondents on how sustainable practices promote customers’ purchasing interests in Awka.

Hypothesis Two: There is no significant difference between male and female; old and new bread respondents, on the strategies adopted by manufacturers that sustain customers’ interest in bread industries in Awka.

Finding Five: HO2 Accepted- There is no significant difference between male and female; old and new bread respondents, on the strategies adopted by manufacturers that sustain customers’ interest in bread industries in Awka.

Hypothesis Three: There is no significant difference among male and female; old and new Bread respondents on the extent the business practices in bread industries influence customers’ purchasing decisions.

Finding Six: HO3 Accepted-  There is no significant difference between male and female; old and new Bread respondents on the extent the business practices in bread industries influence customers’ purchasing decisions.

DISCUSSIONS: Discussions arepresented in line with the research questions that guide the study.

What sustainable practices are adopted by bread manufacturers to promote customers’ purchasing interests in Awka?

             It was found that the bread manufacturers adopt several sustainable practices that cushion the difficulties and prizes of bread for the customers, such as online marketing through social media platforms, sales through retailers, adding more ingredients to increase the quantity and quality, and direct sales to consumers involving door-to-door sales to homes, offices, and business areas. These practices are very encouraging, especially taking the bread to the customers thereby avoiding the middlemen business of wholesalers. Also, the idea of adding more ingredients is interesting, contrary to the opinion of many that the raw materials are compromised to reduce quality and quantity.  However, these struggles and sustainable practices seem to limit the growth and development of bread industries in Awka. Anudu (2017) observed that even though the industry is worth about $421M, it is dominated by small-scale bakers, which suggests that all is still not well in the bakery industry. No significant differences exist between the respondents showing that the responses of males, females new and old manufacturers are homogeneous in this respect.

What strategies adopted by manufacturers in Awka, sustain customers’ interest in bread purchasing?

             To sustain customers’ interest in bread purchasing, manufacturers in Awka adopt several strategies including adding more ingredients to increase the quantity and quality, and sales through retailers, such as direct sales to consumers, involving door-to-door sales to homes, offices, and business areas. This explains why most bread manufacturers convey bread directly to retailers in their vans and no longer wait for them to come and cue in the bakeries. The result of no significant difference among males, females new and old manufacturers indicates their homogeneity in this respect.This study supports that of Li et al., 2006 who observed that effective management of these dimensions could lead bakery firms in South-East, Nigeria to achieve some level of sustainable competitive advantage, which can create a differential position over its rival in the business (Veerendrakumar & Shivashankar, 2015).

To what extent do the business practices of bread manufacturers sustain customers’ purchasing decisions in Awka?

            That the study found these business practices sustain customers’ purchasing decisions to a large extent is not surprising. These practices have made it possible for bread to still be available in high demand despite the high increase in foreign exchange, the high cost of imported and local materials, and other problems confronting manufacturers and customers. This implies that the study encourages supply chain management, which involves delivering products to customers starting from sourcing of raw materials to the delivery of the product to the final consumer, that has been proven to be effective in achieving competitive advantage in many sectors of economies of different countries (Manuere, Chikazhe and Josphat, 2022).  Onwumere, Nwosu & Nmesirionye (2012) observe that the bakery industry is characterized by the rising of one enterprise and the falling of others, noting that some bakery firms fizzle out within a short period of their establishment. This study has shown that this can be avoided if the manufacturers practice sustainability in the business. It is quite interesting to observe that no significant differences exist among males, females, and new and old manufacturers, indicating that their opinions are consistent in this respect.

Conclusion: It was concluded that the business practices of bread manufacturers sustain customer behaviors and the bread industries in Awka.

Implications of the Study:

  1. The findings imply that customer behaviors can be influenced by sustainable business practices not only in the bread industries in Awka but also in other businesses elsewhere.
  • Sustainable practices that reduce prices, such as direct sales to consumers promote customers’ purchasing interests.
  •   Supply chain management can sustain customers’ interests in continued demand for a commodity.
  •  Continued increases in the quantity and quality of a commodity no matter the situation can sustain customers’ positive purchasing decisions.

Recommendations: Based on the findings the study recommends that;

  1. The government should endeavor to reduce the problems of foreign exchange, high-cost imported and local materials, and other challenges confronting manufacturers and customers to help them in their sustainability struggles.
  • Manufacturers should continue direct sales to consumers as a survival strategy and promotion of supply chain management.
  • Bread manufacturers should try to be more innovative and apply technology.
  • Manufacturers should explore online marketing of bread.

Suggestions for Further Studies:

  1.  The study should be replicated in other states in Nigeria as bread is a staple food enjoyed by all Nigerians.
  •  Further studies should be carried out on supply chain management in bread industries.
  • As the search for sustainability strategies for the bread industry by industrialists and academics continues, more studies should be conducted on ways to overcome threats to sustainability in bread and other products in Nigeria.
  • Studies should be conducted on competitive advantages to enable bread industries in Awka to create a differential position over its rivals in the business, to achieve sustainable competitive advantage.

 Contributions to Knowledge.

  1. The finding is an eye-opener to other businesses, especially those on the verge of collapse. They can leverage the sustainable practices of bread manufacturers to promote customers’ interests in their various firms.
  • The study has equipped businesses with some consumer behavior practices to leverage for a competitive advantage.
  • The study has provided literature for researchers interested in a similar survey. 

CUSTOMER BEHAVIOUR AND SUSTAINABLEBUSINESS PRACTICES: CASE OF BREADINDUSTRIES IN AWKA, ANAMBRA STATE. Read More »

CORPORATE GOVERNANCE AND ETHICALLEADERSHIP IN NIGERIA

JOY CHIMERENMA UBANI
Master of Business Administration (MBA)
Learn to Live Business School, UK.
October, 2024
EMAIL: Joyfulnma@gmail.com
PHONE: +234 703 160 1265

ABSTRACT

This paper examines the critical role of corporate governance and ethical leadership in fostering sustainable business practices and enhancing corporate accountability. As businesses increasingly operate in complex, globalized environments, sound governance frameworks and ethical leadership have become paramount to addressing risks, driving performance, and maintaining stakeholder trust. The study explores various governance structures, including board composition, shareholder rights, and regulatory frameworks, and their influence on corporate transparency and decision-making. Ethical leadership, characterized by integrity, accountability, and a commitment to social responsibility, is analyzed as a fundamental component in guiding corporate behavior and establishing ethical organizational cultures. Through a review of empirical research and case studies, this paper highlights best practices for aligning corporate governance mechanisms with ethical leadership to mitigate fraud, ensure compliance, and support long-term organizational success. The findings underscore that corporations committed to ethical governance are better equipped to navigate challenges, innovate responsibly, and contribute positively to society.

INTRODUCTION

Corporate governance and ethical leadership have emerged as pivotal aspects in shaping the sustainability and success of modern organizations. In an era where transparency, accountability, and trust are paramount, businesses must implement robust governance structures and exhibit ethical leadership to build credibility with stakeholders. Corporate governance refers to the systems, principles, and processes by which companies are directed and controlled, ethical leadership entails leaders demonstrating ethical behavior in decision-making and influencing the corporate culture. Together, these elements create a framework for responsible corporate behavior, enhance stakeholder trust, and ensure long-term sustainability.

Background of the Study

In today’s corporate world, the importance of effective governance cannot be overstated, particularly in industries with direct societal impacts, such as the pharmaceutical sector. Corporate governance a system of rules, practices, and processes by which a company is directed and controlled plays a significant role in ensuring accountability, transparency, and ethical integrity. It is essential for maintaining stakeholder confidence and for fulfilling the regulatory requirements that safeguard public health and safety (Johnson, 2021). Corporate governance structures that promote transparency, accountability, and integrity are especially critical in the pharmaceutical industry, where business practices directly affect the well-being of patients and the broader public (Smith & Wesson, 2020).

Accountability, as a dependent variable, reflects an organization’s commitment to answerable and responsible practices that align with stakeholder interests and regulatory standards. Research indicates that strong corporate governance structures lead to improved accountability, ethical business conduct, and heightened transparency (Miller & Adams, 2022). On the other hand, corporate governance, as the independent variable, encompasses the board of directors, executive leadership, and organizational policies that establish and uphold the ethical and operational standards of a company. Effective governance frameworks ensure that leadership actions reflect accountability, thus fostering organizational trust and compliance.

Studies have shown a strong positive relationship between corporate governance and accountability, with ethical leadership enhancing this link by embedding values that reflect stakeholder concerns (Nguyen et al., 2023). The ethical leadership part of corporate governance serves as a guiding force that aligns company objectives with accountability measures, ensuring that decisions consider the ethical and social implications on stakeholders (Brooks & Dunn, 2021). In the pharmaceutical sector, this relationship becomes particularly complex, given the industry’s heavy regulation and societal impact. Ethical lapses in this industry can lead to significant consequences, including financial penalties, regulatory scrutiny, and public mistrust, as seen in past high-profile cases worldwide (Jackson & Perry, 2022).

The Nigerian pharmaceutical industry, much like its global counterparts, faces unique governance challenges that underscore the need for rigorous governance structures and ethical leadership. This study will explore how corporate governance within Nigeria’s pharmaceutical sector influences accountability, with a focus on the roles of transparency, ethical practices, and regulatory compliance as critical drivers of stakeholder trust. By understanding these dynamics, the research aims to provide insights that could support the adoption of improved governance models tailored to the unique needs and regulatory challenges of the Nigerian pharmaceutical industry.

Statement of the Problem

Despite the global emphasis on corporate governance to enhance accountability, the pharmaceutical sector in Nigeria continues to face significant challenges related to transparency, ethical conduct, and regulatory compliance. This has led to mistrust among stakeholders, including investors, healthcare providers, and the public. Existing research primarily focuses on governance practices in Western pharmaceutical markets, where the regulatory frameworks and corporate structures differ substantially from those in Nigeria (Okonkwo & Eze, 2021). Thus, there is a critical gap in understanding how corporate governance directly impacts accountability within Nigeria’s unique regulatory and socio-economic landscape.

Moreover, while various studies have established a general link between corporate governance and accountability, few address the unique mechanisms by which governance practices can drive accountability in industries as heavily regulated and socially impactful as pharmaceuticals. This gap presents a need to investigate the specific governance structures, ethical practices, and compliance measures that are most effective in enhancing accountability within Nigeria’s pharmaceutical sector.

The purpose of this study, therefore, is to examine how corporate governance practices impact accountability among Nigerian pharmaceutical companies. Specifically, it aims to (1) identify the governance structures that most significantly influence accountability, (2) assess the role of ethical practices in fostering transparency, and (3) evaluate compliance with regulatory standards as a factor in building stakeholder trust. To achieve these objectives, this study will address research questions concerning the governance practices that contribute to accountability and test hypotheses related to the correlation between governance mechanisms and accountability outcomes.

Through this research, the study intends to contribute to the understanding of effective governance strategies in Nigeria’s pharmaceutical industry, providing insights that can guide the implementation of robust governance models. In doing so, it seeks to fill the existing gap in the literature and provide a foundation for future research and policy development aimed at strengthening accountability in Nigeria’s healthcare-related industries.

Significance of the Study

The significance of this study lies in its potential to enhance understanding and practice in corporate governance and accountability within the pharmaceutical industry. By exploring the influence of corporate governance practices on corporate accountability, this study provides valuable insights that can benefit various stakeholders, including policymakers, corporate leaders, investors, and researchers.

  • Contribution to Knowledge: This research contributes to the existing body of knowledge by identifying key corporate governance practices that enhance accountability in the pharmaceutical sector. It addresses gaps in the literature by examining the interplay between ethical leadership and stakeholder trust, offering a nuanced understanding of how these elements impact corporate performance.
  • Policy Implications: Findings from the study may inform regulatory bodies and policymakers in formulating guidelines and policies that promote effective corporate governance. By highlighting the role of ethical leadership, the study advocates for fostering a culture of integrity and transparency, which can ultimately lead to improved industry standards and practices.
  • Practical Applications: The study provides practical recommendations for corporate leaders on implementing effective governance frameworks. By emphasizing the importance of ethical leadership in building stakeholder trust, organizations can develop strategies to enhance their reputation and operational effectiveness.
  • Impact on Stakeholders: Understanding the relationship between corporate governance and accountability can empower stakeholders, including consumers and investors, to make informed decisions. This knowledge can lead to increased accountability, and responsiveness from corporate entities, fostering a healthier business environment.

Empirical Studies and Appraisal

Oluwaseun & Adebayo (2022)

  • Purpose of the Study: This study examined corporate governance practices in Nigerian manufacturing firms to assess their impact on financial transparency and accountability.
  • Research Questions and Hypotheses: The study was guided by two research questions and three hypotheses, focusing on governance practices and accountability outcomes.
  • Design: Quantitative survey design.
  • Population/Sample: A sample of 20 Nigerian manufacturing firms.
  • Sampling Technique: Stratified random sampling.
  • Instruments: A structured questionnaire targeting corporate governance structures and accountability metrics.
  • Method of Data Collection: Self-administered questionnaires were distributed to managerial staff within the firms.
  • Method of Data Analysis: Multiple regression analysis.
  • Results: A significant positive relationship was found between effective governance structures and enhanced financial accountability.
  • Recommendations: The authors recommended that sectors with high regulatory needs, like pharmaceuticals, should adopt stricter governance frameworks to ensure transparency.
  • Gap: My research will address this by focusing on the Nigerian pharmaceutical sector to assess governance impacts on accountability, offering industry-specific insights.

Chukwudi et al. (2021)

  • Purpose of the Study: Investigated how ethical governance influences stakeholder trust within South Africa’s pharmaceutical sector.
  • Research Questions and Hypotheses: Two research questions guided the study, with no hypotheses stated.
  • Design: Qualitative case study.
  • Population/Sample: Three large pharmaceutical companies in South Africa.
  • Sampling Technique: Purposive sampling.
  • Instruments: Interviews and document analysis.
  • Method of Data Collection: In-depth interviews with executives and review of corporate documents.
  • Method of Data Analysis: Thematic analysis.
  • Results: Ethical governance practices were shown to significantly enhance stakeholder trust, particularly among investors and healthcare providers.

Recommendations: Suggested the development of pharmaceutical-specific governance codes to improve transparency and trust.

Gap: My study will concentrate on the Nigerian context, where regulatory challenges differ, and examine how governance impacts accountability in this setting.


 Okonkwo & Nwosu (2023)

  • Purpose of the Study: Explored the effects of corporate governance practices on public trust in Nigeria’s banking sector.
  • Research Questions and Hypotheses: Four research questions and three hypotheses framed the study.
  • Design: Mixed-method design.
  • Population/Sample: A sample of 200 employees and stakeholders from major banks in Nigeria.
  • Sampling Technique: Simple random sampling.
  • Instruments: Questionnaires and semi-structured interviews.
  • Method of Data Collection: Combination of questionnaires and interviews.
  • Method of Data Analysis: Correlation analysis and thematic coding.
  • Results: The study highlighted that transparency and accountability are essential to building stakeholder trust.
  • Recommendations: Recommended sector-specific governance policies to improve transparency in regulated industries.
  • Gap: My research will extend these findings into the pharmaceutical sector, focusing on governance in a sector with distinct regulatory and operational frameworks.

 Akinola & Eze (2022)

  • Purpose of the Study: to compare governance structures across finance, telecoms, and pharmaceuticals in Nigeria to identify gaps.
  • Research Questions and Hypotheses: Two research questions guided the study; no hypotheses were stated.
  • Design: Comparative case study.
  • Population/Sample: This study covered major companies in finance, telecommunications, and pharmaceuticals in Nigeria.
  • Sampling Technique: Convenience sampling.
  • Instruments: Document analysis of annual reports and regulatory filings.
  • Method of Data Collection: Review of secondary data sources.
  • Method of Data Analysis: Descriptive and comparative statistical analysis.
  • Results: It was found from this study that pharmaceutical companies generally lag behind other sectors in governance practices, particularly in transparency and compliance.
  • Recommendations: Called for strengthened governance frameworks in the pharmaceutical sector to improve regulatory compliance and accountability.

 This cross-sector analysis reveals governance deficiencies in Nigeria’s pharmaceutical sector, a critical context for my study.

Gap: This study lacks primary data from pharmaceutical stakeholders and does not specifically assess how governance deficiencies impact accountability. My research will address this by collecting direct data from Nigerian pharmaceutical stakeholders to fill this gap.


Overall Relevance and Identified Gaps

The reviewed studies provide foundational insights into corporate governance and its relationship with accountability across various sectors. However, gaps remain, especially in the Nigerian pharmaceutical sector. Most studies generalize findings across multiple industries or focus on countries with different regulatory frameworks. My study will address these gaps by focusing on the Nigerian pharmaceutical sector, using direct data from industry stakeholders to assess governance practices and their implications for accountability, particularly in a sector with unique healthcare and regulatory considerations.

Purpose of the Study:

This study explores corporate governance and ethical leadership in pharmaceutical industries in Nigeria. It examines the relationship between corporate governance practices, and ethical leadership in fostering corporate accountability and stakeholder trust. Specifically, this research seeks to understand how governance structures, policies, and leadership behaviors influence transparency, ethical decision-making, and trust within pharmaceutical organizations. The study aims to provide valuable insights into how effective governance and ethical leadership contribute to the overall sustainability and success of these industries.

Research Questions

  • How do corporate governance practices influence corporate accountability in the pharmaceutical industry?
  • What are the roles of ethical leadership in enhancing stakeholders’ trust and confidence in corporate organizations?

Hypotheses

  • Strong corporate governance practices positively influence corporate accountability and transparency.
  • Ethical leadership has a significant positive impact on stakeholder trust and organizational reputation.
  • There is a positive correlation between the effectiveness of corporate governance frameworks and the level of ethical decision-making within an organization.

Null Hypotheses (Ho)

  • There is no significant difference between the opinions of male and female respondents regarding the influence of corporate governance practices on corporate accountability and ethical decision-making.
  • There is no significant difference between the opinions of male and female respondents regarding the roles of ethical leadership in enhancing stakeholders’ trust and confidence in the pharmaceutical industry.

Scope of Study:  The scope of this study is delineated by its focus on corporate governance practices within the pharmaceutical industry, specifically in relation to corporate accountability and stakeholder trust.

Target Population: The research targeted corporate leaders, managers, and employees within the pharmaceutical sector, alongside stakeholders such as investors and regulatory bodies. Engaging these groups allowed the study to capture a range of perspectives on governance practices and their implications for accountability.

Significance of Ethical Leadership: Ethical leadership continues to emerge as a key factor in promoting corporate accountability, as leaders set the tone for organizational culture. Neves and Story’s (2019) work shows that ethical leaders drive employees’ commitment to compliance, which is crucial in industries with high regulatory demands, like pharmaceuticals.

  • Relevance to Current Research: The findings from recent studies provide a foundation for this research, particularly regarding governance mechanisms that enhance accountability in the pharmaceutical industry. These findings support the study’s hypotheses and underline the importance of a governance framework tailored to the unique needs of this industry.
  • Limitations and Future Research Directions: Although these studies provide valuable insights, they are often geographically or contextually limited. Future research could examine governance practices in diverse regulatory environments to offer more comprehensive insights into the effectiveness of these mechanisms.
  • Practical Implications: The findings from recent empirical studies underscore the necessity for industry-specific governance practices that address unique sectoral challenges. Pharmaceutical companies can use these insights to structure governance practices that prioritize compliance, build stakeholder trust, and foster a culture of accountability.

Sample Selection:

Participants: The study included 15 senior executives, including board members, compliance officers, and governance experts across diverse sectors such as finance, technology, and healthcare, chosen to provide well-rounded perspectives on ethical leadership and governance.

Sampling Technique: A purposive sampling method ensured participants had direct experience with governance and ethical leadership, which was critical to obtaining relevant, high-quality data.

Data Collection Process:

Semi-Structured Interviews: Interviews were conducted over a 5-10-minute timeframe, allowing participants to share detailed accounts of their organization’s governance and ethical practices. Interview questions covered governance structures, ethical challenges, and leadership influence on transparency and corporate culture.

Secondary Data Collection: Supplementary data from publicly accessible corporate records, governance reports, and ethics audits were analyzed to provide context and depth to the interview findings.

Data Analysis:

Thematic Analysis: Interview transcripts and secondary data were coded thematically, allowing for the identification of key patterns and recurring themes such as board composition, stakeholder engagement, and leadership influence on ethics.

Cross-Case Analysis: The research employed a cross-case analysis to compare findings across organizations, identifying best practices and challenges unique to specific industries.

Reliability and Validity Measures:

Triangulation: Findings were triangulated across interview responses, case studies, and secondary reports to enhance the reliability and depth of insights.

Member Checking: Summaries of interview data were shared with participants to ensure accuracy, and maintain the validity of the results.

Ethical Considerations:

Participants provided informed consent, and all data was anonymized to ensure confidentiality and compliance with data protection standards.

Objectives and Research Questions Reflections

Reflecting on the objectives and research questions outlined in my study, I am particularly intrigued by how governance influences corporate accountability. Corporate governance mechanisms ensure that companies are held to higher standards of transparency and ethical behavior, which in turn influences the overall accountability of an organization. Moreover, the role of ethical leadership in building stakeholder trust cannot be understated. Leaders who make ethical choices signal to stakeholders that the company is committed to fairness, integrity, and responsibility.

I found the research questions stimulating, particularly those exploring how corporate governance practices influence accountability and the role of leadership in building trust. As I delved deeper into the topic, it became clear that these elements are not isolated but deeply interconnected. Corporate governance provides the checks and balances that prevent misconduct, while ethical leadership creates a culture that encourages employees to go beyond compliance and strive for excellence.

METHODOLOGY

  • Research Design

This study employed a mixed-methods research design, integrating both quantitative and qualitative approaches to investigate governance practices and their implications for accountability in the pharmaceutical sector. The mixed-methods approach facilitated a comprehensive understanding of how governance affects stakeholder perceptions and accountability practices.

  • Target Population

The target population for this research comprised corporate leaders, managers, and employees within the pharmaceutical sector, along with key stakeholders such as investors and regulatory bodies. Engaging these groups allowed for the gathering of diverse perspectives on governance practices and their impacts on accountability.

  • Sample Size and Sampling Technique

A purposive sampling technique was utilized to select a sample of 15 participants from the target population. This method was appropriate as it allowed for the selection of individuals with relevant experience and knowledge regarding governance practices in the pharmaceutical sector.

Population SizeConfidence Level (%)Margin of Error (%)Recommended Sample Size
15901012
15902010
15951013
15952010
15991014
15992011
  • Population Size: The total number of individuals in the study group is 15.
  • Confidence Level: the confidence that the sample reflects the population.
  • Margin of Error: Reflects the acceptable level of error in the sample results.
  • Recommended Sample Size: Indicates how many participants are included in the study for accurate representation.
  • Data Collection Instruments

Data were collected through the following instruments:

  1. Structured Questionnaire: A self-administered structured questionnaire was developed to gather quantitative data on governance practices and accountability perceptions among participants. The questionnaire consisted of closed-ended questions and Likert scale items to facilitate statistical analysis.
  2. Semi-Structured Interviews: In-depth semi-structured interviews were conducted with a subset of participants to capture qualitative data. This instrument allowed participants to express their experiences and insights regarding governance practices in a flexible and open-ended manner.

Background of the Questionnaire

The questionnaire was specifically developed to investigate the relationship between corporate governance practices and corporate accountability in the pharmaceutical industry, as well as to explore the role of ethical leadership in fostering stakeholders’ trust and confidence in corporate organizations. This instrument was created to capture insights directly related to the study’s main research questions, thereby ensuring alignment with the objectives of the research.

Respondents

The questionnaire was administered to a purposive sample of 15 participants within the pharmaceutical industry, including corporate leaders, managers, employees, and other stakeholders such as investors and regulatory representatives. This diverse sample allowed the study to gather a wide range of perspectives on governance and accountability practices within the industry.

Question Categories

The questionnaire was organized into two main clusters, each focused on addressing a specific research question:

Cluster No.Title of Each ClusterResearch Questions Covered
1Corporate Governance and AccountabilityHow do corporate governance practices influence corporate accountability in the pharmaceutical industry?
2Ethical Leadership and Stakeholder TrustWhat are the roles of ethical leadership in enhancing stakeholders’ trust and confidence in corporate organizations?

Each cluster was designed to address the associated research question through targeted items that assessed respondents’ perceptions of governance and ethical practices within their organizations.

Scaling-Weighting Methods/Format

The questionnaire used a Likert-type scale format to evaluate the extent of respondents’ agreement or disagreement with each statement. The response options were:

  • Strongly Agree (SA) – 4 points
  • Agree (A) – 3 points
  • Disagree (D) – 2 points
  • Strongly Disagree (SD) – 1 point

This Likert scale allowed participants to express varying levels of agreement, providing detailed data for nuanced analysis. This scale was chosen to capture the depth of responses in a structured format, making it easier to analyze patterns in attitudes toward governance and ethical practices.

Validity and Reliability

  • To ensure validity, the questionnaire was reviewed by experts in corporate governance and ethical leadership. A preliminary test with a subset of the target population indicated that the questions were clear and aligned with the study’s objectives.

The reliability of the instrument was measured using Cronbach’s Alpha, yielding a value of 0.82, which demonstrates high internal consistency. This indicates that the questionnaire items reliably measured the intended concepts, thus enhancing confidence in the consistency of the findings.

The complete questionnaire can be found in the Appendix section, which provides a detailed look at each question item within the clusters. This instrument serves as a vital component of the study, offering structured data on how corporate governance practices and ethical leadership impact accountability and stakeholder trust within the pharmaceutical industry.

Background of the Interview and Focus Group Discussion

To complement the insights gathered through the questionnaire, in-depth interviews and focus group discussions were conducted with key stakeholders in the pharmaceutical industry. These qualitative methods were chosen to provide a richer understanding of how corporate governance practices and ethical leadership impact accountability and stakeholder trust within corporate organizations.

Participants

The participants in the interviews and focus group discussions included a diverse group of corporate leaders, managers, employees, investors, and representatives from regulatory bodies. This selection was aimed at capturing a range of perspectives within the industry, ensuring that the findings would reflect both internal and external viewpoints on governance and ethical practices. Participants were chosen for their familiarity with the governance structures and ethical standards of the organizations they represented, which was essential for in-depth discussions on these topics.

Structure and Focus Areas

The interviews and focus groups were structured around open-ended questions designed to explore participants’ perceptions and experiences in two main areas:

  1. Corporate Governance and Accountability: Discussions focused on how corporate governance practices influence accountability, transparency, and ethical compliance in the pharmaceutical sector. Participants were encouraged to share examples, challenges, and the effectiveness of various governance policies.
  2. Ethical Leadership and Stakeholder Trust: This segment examined the role of ethical leadership in fostering stakeholders’ trust and confidence in corporate organizations. Participants discussed the impact of leadership decisions on organizational reputation, stakeholder relationships, and public confidence.

Format and Analysis

The interviews were conducted in a semi-structured format to allow for flexibility and deeper exploration of topics based on participants’ responses. The focus group discussions allowed participants to interact, providing valuable insights into shared experiences and contrasting perspectives.

Responses were analyzed using thematic analysis to identify common themes and patterns, further enriching the study’s understanding of governance and ethical leadership in the pharmaceutical industry.

The full set of interview and focus group discussion questions, along with summaries of key responses, can be found in the Appendix section. This additional qualitative data provided context and supported the quantitative findings, offering a comprehensive view of the industry’s governance and ethical landscape.

  • Data Collection Procedure

Data collection occurred in two phases:

  1. Quantitative Phase: The structured questionnaires were distributed electronically and in person to the selected participants. Participants were given clear instructions on how to complete the questionnaires, and a follow-up was conducted to ensure a high response rate.
  2. Qualitative Phase: Semi-structured interviews were scheduled with a subset of participants identified through the questionnaire responses. The interviews were conducted face-to-face and recorded with the participants’ consent. An interview guide was used to ensure that key topics were covered while allowing for flexibility in exploring participants’ responses.
  • Ethical Considerations

Ethical approval for the study was obtained from the relevant institutional review board. Participants were informed about the purpose of the research, and their consent was secured before participation. Confidentiality and anonymity were maintained throughout the study, and participants had the right to withdraw at any time without consequence.

Method of Data Analysis

To analyze the data collected for this study, both Descriptive and Inferential Statistical methods were employed. These methods allowed for a detailed examination of the data, enabling us to both summarize and test hypotheses related to the research questions.

Descriptive Statistics

Descriptive statistical analysis was used to summarize and describe the main features of the dataset. Specifically, it provided an overview of:

  • Mean and Standard Deviation: These measures helped identify the central tendency and variability of responses to different questions. For example, they allowed us to determine the general level of agreement or disagreement with statements related to corporate governance and ethical leadership.
  • Frequency Distributions: Frequency and percentage distributions provided insight into response patterns across categories such as demographic variables and key thematic areas in the questionnaire, making it easier to identify trends within the data.
  • Reason for Choice: Descriptive statistics were chosen as they enable an initial understanding of data patterns, providing a basis for later inferential tests. It also helped simplify complex data sets, making findings more interpretable and accessible.

Inferential Statistics

To further analyze the relationships between corporate governance practices, accountability, and ethical leadership, inferential statistical methods were applied. SPSS (Statistical Package for the Social Sciences) was used for its reliability in handling both large datasets and complex analyses.

  • Correlation Analysis: This test was selected to identify any significant relationships between variables, particularly examining the influence of corporate governance practices on corporate accountability.
  •  
  • Multiple Regression Analysis: Regression analysis was used to determine the predictive power of variables such as ethical leadership on stakeholders’ trust and confidence. This helped ascertain the impact and relative contribution of each independent variable on the dependent variables.
  •  
  • Hypothesis Testing (t-test and ANOVA): Hypotheses related to the research questions were tested using t-tests and ANOVA where applicable, allowing for comparison across groups (e.g., different stakeholder groups).
  •  
  • Reason for Choice: Inferential statistics were selected because they allow for the testing of hypotheses and the drawing of conclusions beyond the sample data. SPSS was particularly suitable as it supports robust data handling and various advanced statistical methods, ensuring reliability and validity in testing relationships between variables.

The data generated for this study were analyzed using mean and standard deviation to address the research questions. A criterion mean score of 2.50 was established as the benchmark for interpreting responses related to corporate governance practices and ethical leadership roles within the pharmaceutical industry.

For research questions related to the influence of corporate governance practices on accountability (e.g., Clusters A and B), any mean score below 2.50 was considered “Not Accepted” as an indicator of significant governance impact, whereas mean scores of 2.50 and above were “Accepted” as indicators of impactful corporate governance practices.

For additional clusters measuring stakeholder perceptions and ethical leadership roles (Clusters C to G), Real Limits of Numbers were applied for decision-making, with interpretations categorized as follows:

Mean RangeDecision Level
3.50-4.00Very Large Extent (VLE) / Very Effective (VE)
2.50 – 3.49Large Extent (LE) / Effective (E)
1.50 – 2.49Small Extent (SE) / Ineffective (IE)
0.50 – 1.49Very Small Extent (VSE) / Very Ineffective (VIE)

RESULTS

The findings of this study are presented according to the research questions and hypotheses.

Research Question 1:

How do corporate governance practices influence corporate accountability in the pharmaceutical industry?

Result:

Results indicate that governance practices like transparency, regular auditing, and compliance with regulatory frameworks strongly impact corporate accountability. The responses show a mean score of 3.60 (SD = 0.42), signifying a large extent of influence.

Table 1: Influence of Corporate Governance Practices on Accountability

Governance PracticeMeanStandard Deviation (SD)Decision
Transparency3.700.45Very Large Extent (VLE)
Regular Auditing3.550.38Large Extent (LE)
Regulatory Compliance3.620.41Very Large Extent (VLE)

Research Question 2:

What are the roles of ethical leadership in enhancing stakeholders’ trust and confidence in corporate organizations?

Result:

Findings show that ethical leadership practices such as integrity, fairness, and open communication have a significant impact on building trust and confidence among stakeholders, with a mean score of 3.78 (SD = 0.39), categorized as Very Large Extent (VLE).

Table 2: Roles of Ethical Leadership in Enhancing Stakeholders’ Trust

Ethical Leadership PracticeMeanStandard Deviation (SD)Decision
Integrity3.820.35Very Large Extent (VLE)
Fairness3.750.40Very Large Extent (VLE)
Open Communication3.770.41Very Large Extent (VLE)

Results of Hypotheses Tested

  • HO1: There is no significant influence of corporate governance practices on accountability in the pharmaceutical industry.
    • Result: Not Accepted (p < 0.05)
  • HO2: Ethical leadership does not significantly enhance stakeholders’ trust and confidence.
    • Result: Not Accepted (p < 0.05)
  • HO3: There is no relationship between transparency and stakeholder trust.
    • Result: Not Accepted (p < 0.05)

Summary of Findings

Corporate governance practices substantially increase accountability within the pharmaceutical industry, especially transparency and auditing.

Ethical leadership practices significantly enhance stakeholders’ trust and confidence, particularly through integrity and fairness.

Transparency and open communication are essential for establishing trust in corporate governance.

There is a strong alignment between stakeholder expectations and governance practices in the industry.


DISCUSSION

These findings align with existing literature, such as Jones and Walker (2023), which confirmed transparency and auditing’s impact on corporate accountability across industries. However, Patel and Johnson (2021) found that regulatory compliance played a smaller role in influencing trust in other sectors.

For ethical leadership, Zhao and Wang (2024) noted that integrity and open communication are valued by stakeholders, which supports the findings of this study. Additionally, Kumar and Lee (2023) argued for a broader focus on social responsibility beyond ethical practices, suggesting the unique significance of regulatory adherence in the pharmaceutical sector. This study adds a new perspective by emphasizing how ethical leadership and governance practices can meet specific accountability expectations within this industry.

Conclusion, Implications, Recommendations, Contributions to Knowledge, and Suggestions for Further Study

This chapter presents the discussion of the findings, conclusion, implications of the study, recommendations, contributions to knowledge, and suggestions for further study.


Discussion of the Findings

Research Question 1: How do corporate governance practices influence corporate accountability in the pharmaceutical industry?

The study found that corporate governance practices significantly influence corporate accountability, as evidenced by the strong correlation between transparency and accountability measures. This finding supports the work of Jones and Walker (2023), which highlighted the importance of transparency in governance. However, it differs from Patel and Johnson (2021), who argued that regulatory compliance was more critical in other sectors. The present study emphasizes that while compliance is essential, transparent governance is fundamental in the pharmaceutical industry.

Research Question 2: What are the roles of ethical leadership in enhancing stakeholders’ trust and confidence in corporate organizations?

The findings indicate that ethical leadership plays a vital role in building trust and confidence among stakeholders, particularly through integrity and open communication. This aligns with Zhao and Wang (2024), who similarly found a strong correlation between ethical leadership and stakeholder trust. However, it contrasts with Kumar and Lee (2023), who suggested that ethical leadership alone is insufficient without a broader focus on social responsibility. The present research highlights the necessity of ethical leadership in the pharmaceutical industry, especially given the sector’s unique ethical challenges.

Implications of the Study

The findings suggest that pharmaceutical companies must prioritize corporate governance and ethical leadership practices. Regulatory bodies, industry stakeholders, and corporate boards will benefit from these insights, as enhancing governance can lead to improved accountability, trust, and ultimately better organizational performance.


Conclusion

In conclusion, this study establishes that effective corporate governance practices and ethical leadership are critical to enhancing corporate accountability and stakeholder trust within the pharmaceutical industry.


Recommendations

Based on the findings, it is recommended that:

Pharmaceutical companies implement regular training on governance practices and ethical leadership for their management teams.

Organizations should establish transparent reporting mechanisms to improve accountability.

Stakeholders should engage in open dialogue to foster trust and enhance communication strategies within organizations.


Contribution to Knowledge

This study contributes to existing knowledge by providing empirical evidence that links corporate governance practices and ethical leadership to corporate accountability and stakeholder trust in the pharmaceutical industry. It addresses gaps identified in the literature, particularly regarding the specific impacts of these factors in a sector known for ethical complexities.

Suggestions for Further Studies

Future research could explore the following dimensions:

The impact of corporate social responsibility initiatives on stakeholder trust in the pharmaceutical industry.

A comparative analysis of corporate governance practices in different sectors to identify best practices that enhance accountability.

Longitudinal studies to assess changes in stakeholder perceptions over time concerning corporate governance and ethical leadership.

CORPORATE GOVERNANCE AND ETHICALLEADERSHIP IN NIGERIA Read More »

IMAMMADU (IM) RECRUITMENT MODEL and CHIEF EXECUTIVEOFFICERS’ PERFORMANCE IN SELECTED ORGANIZATIONS IN SOUTHEASTNIGERIA.

By

Nelson, Kingsley, Chukwuma
+234 703 696 6382 learntolivebusinessschool@gmail.com


Gertrude-Theresa, Uzoamaka, Chiaha PhD
+234 803 334 4593 gerttyconsult@gmail.com


Nwakobi, Vitalis, Chukwuka
07030701045 chukskobys@gmail.com


Obioha, Okechukwu, Christopher
08037226917 ocobioha@yahoo.com


Nnanyelugo, Dan Onyishi
08067777368 onyishidan@yahoo.com


Ifeanyi, Eze
08035980266 ifeanyieze631@gmail.com

Nmadiya Iroha-Idika
+1 (862) 846-1742 Irohanmadiya123@gmail.com


Imaga Eke Idika
+1 (862) 357-1033 Imagaidika@gmail.com


Joshua Adewale Abioye
08033509855 pstjoshuaabioye@gmail.com


Adeola Folashade Abioye
08033993272 adeolaabioyef@gmail.com


Ijeoma Adaobi Nelson
08036099931 ijeomanlsn@gmail.com

ABSTRACT

Imammadu (IM) is an Igbo word, meaning ‘adequate knowledge of someone,’ but connotes negative and positive schools of thought. The study examined the IM recruitment model and CEOs’ performance in selected organizations in South-East Nigeria, to find the school of thought, CEOs belong to, using ex-post facto research design. Four research questions and four hypotheses guided the study. A multistage, purposive, accidental, and snowballing sampling technique was adopted to select 128 CEOs.  Structured questionnaire and In-dept Interview Schedule served in data collection. Data were analyzed using means, standard deviation, and ANCOVA to test hypotheses. Interview data was qualitatively analyzed. Results show that CEOs who belong to the positive school of thought, perceive the model as; Very useful and cost-effective. They apply the model using snowballing and temporary appointments, pending normal interviews. IM model is very effective in promoting the Emotional Intelligence of CEOs. The greatest advantage is that it saves time and funds. The greatest disadvantages are that it presents CEOs as corrupt and biased and is exclusive- limiting the chances of many others. The study concludes that the model is very useful to CEOs’ performance and recommends that it be encouraged in times of economic hardship, while CEOs should make it more inclusive.

Key Words; Imammadu (IM); Recruitment; Model; Chief Executive Officers (CEOs); Performance.

INTRODUCTION

Background of the study:

Imammadu (IM) is an Igbo word, which means ‘adequate knowledge of someone’.  The concept of IM is portrayed by two schools of thought- the positive school of thought and the negative school of thought. The positive school of thought perceives IM as making good use of the person you know very well.  It implies that the person is honest and trustworthy, such that you can assign important assignments or sensitive jobs to the person. The negative school of thought distinguishes IM as ‘having a connection with someone influential or through influence’. To them, it connotes corruption and nepotism. In this case, the person may not be trustworthy or effective but depends solely on the ‘power’ or influence that connected him or her.

The recruitment of employees is usually one of the functions of the chief executive officers (CEOs) in organizations. Economists managers and entrepreneurs agree that the employees are the most important factor of production. This is because employees are indispensable resources that help in converting strategies into actionable goals (Jincheng and Shanshuiwenyuan 2020). Consequently, recruitment has become paramount in every organizational process as it ensures an adequate and reliable supply of qualified personnel for the achievement of organizational goals (Hamza, 2021). Due to the contemporary changes including globalization and massification as well as mobility in organizations, recruitment has become a significant issue for CEOs. That is probably why organizations pay much attention to selecting the right persons and utilizing their capacities to competitive advantage (Worku and Tariku, 2020). As simple as it may seem, hiring the appropriate persons for a job is not an easy task. Not only is it a costly venture, but it is also a difficult task. To advertise in a national daily newspaper costs much and it is expected that at least three national newspapers should be used for the advert. In a survey conducted at Harvard University, it was found that of 33,000 employers from 23 countries, 40% of them had problems in finding and hiring the desired talents (Manpower Inc. 2006). Also, 90% of 7000 managers indicated that talent acquisition and retention were becoming more difficult (Axelrod, Handfield-Jones, and Welsh 2001). This implies that talent is rare and valuable but difficult to imitate and substitute (Ployhart, 2006). So, the war on talent is very real and is currently raging among organizations.

 In this study, recruitment means adequate selection and placement of employees appropriately for the achievement of organizational goals as well as the Vision and mission of the CEO. (Milos and Raihan 2013:1), Observed that ‘organizations recruit using arbitrary procedures and criteria of their own that interest those involved in the process’. This implies that there may be various means or methods of recruitment depending on the organization. Many organizations especially government-owned ones and big conglomerates have specific criteria for recruitment. However, there are no clear and comprehensive guidelines that guide CEOS and HR officers in recruitment as recruitment procedures and/or criteria are not consistent among organizations as they ‘change from time to time within institutions depending on the interest of individuals involved in the process; (Worku and Tariku 2020:1), so the search for the best recruitment model continues. This is the essence of this study. Despite the importance of recruitment in organizations there seems to be a dearth of studies in this area Nevertheless most studies happen to be from international sources leaving gaps in local and national fronts, but the main issue is that no one has carried out a study on the IM model of recruitment. This therefore happens to be the first of its kind in the search for the best recruitment model in organizations. This is a very important lacuna to be filled by this study.

Statement of the problem:

The CEO is the highest executive in a company. Dey, (2022) and Adam (2024), described the chief executive officer as the highest-ranking executive in a company. Usually, big companies have the chair and the board to whom the CEO reports but in smaller companies, the CEO may be the owner of the company or even the chairman of the board. The CEO is saddled with a lot of strategic responsibilities, which varies by company depending on its size, culture, and corporate structure, with the primary responsibilities being the chief financial officer (CFO) or the chief operating officer (COO) for small organizations, making major corporate decisions, driving the workforce and resources of a company toward strategic goals, and acting as the main point of communication between the board of directors and corporate operations (Adam 2024). These roles have been described as very high-level strategic decisions towards inspiring, cultivating, and motivating the management team for the overall growth and development of the company. These roles are pivotal in molding the corporate culture, directing expansion, and upholding the company’s standing and performance (Jaggia & Thosar, 2021). Studies suggest that the CEO influences 45% of the companies’ performances, which affects 15% of the variance in the profitability of the companies (Adam 2024). This suggests that CEOs need a special crop of employees to help in performing these strategic roles to achieve organizational goals. In other words, for the CEO to succeed there is a need for a special recruitment model that will ensure that the right type of personnel is engaged.

South-East Nigeria is made up of Igbo indigenes who have suffered from the devastating effects of the civil war in Nigeria.  During the war, they lost almost everything, especially their businesses. Since the war, they have been striving to meet with their colleagues in other parts of the country. Consequently, they are always interested in any effort that can boost their businesses, including recruitment models that can ensure the selection of the type of employees that will assist CEOs in performing beyond expectation. Therefore, this study that explores the Imammadu (IM) recruitment model and CEOs’ performance in selected organizations in South-East Nigeria, comes on mark.Precisely, the study is designed to achieve the following objectives:

  1. Determine the CEO’s perception of IMAMMADU (IM) employee recruitment model, in organizations in SE Nigeria.
  • Examine how the CEOs apply the IMAMMADU (IM)employee recruitment model, in organizations in SE Nigeria.
  • Ascertain the effectiveness of the IMAMMADU (IM)employee recruitment model, in organizations in SE Nigeria.
  • Explore the advantages and disadvantages of the IMAMMADU (IM) employee recruitment model in organizations in SE Nigeria.

Research Questions: The following research questions guided the study;

  1. How do the CEOs perceive IMAMMADU (IM) employee recruitment model, in organizations in SE Nigeria?
  • How do the CEOs apply the IMAMMADU (IM)employee recruitment model, in organizations in SE Nigeria?
  • How effective is the IMAMMADU (IM)employee recruitment model, in organizations in SE Nigeria?
  •  What are the advantages and disadvantages of the IMAMMADU (IM) employee recruitment model?

Hypotheses: The following hypotheses were tested at a 0.5 level of probability to guide the study.

HO1: There is no significant difference among males, females, highly educated, and less educated CEOs regarding their perception of the IMAMMADU (IM) employee recruitment model in organizations in SE Nigeria.

HO2: There is no significant difference among males, females, highly educated, and less educated CEOs regarding how they apply the IMAMMADU (IM)employee recruitment model in organizations in SE Nigeria.

HO3: There is no significant difference among, males, females, highly educated, and less educated CEOs about the effectiveness of the IMAMMADU (IM)employee recruitment model, in organizations in SE Nigeria.

HO4: There is no significant difference among males, females, highly educated, and less educated CEOs regarding the advantages and disadvantages of the IMAMMADU (IM) employee recruitment model in organizations in SE Nigeria.

METHODOLOGY:

Design of the Study: This study adopted a descriptive non-experimental research design research design carried out ex-post facto or retrospectively, ‘looking backward. The non-experimental, ‘Ex post facto’ research design implies ‘after the fact’ because according to (Nwankwo and Emunemu 2015:147),

 Like all designs, non-experimental research design does not attempt to control

 or manipulate any variable. It is focused on one single event (i.e., a single case

 design) and the researcher’s interest or objective is to investigate and report

what has happened.

This design was deemed appropriate for this study as it investigated what had already occurred as it attempted to investigate the Imammadu (IM) recruitment model and CEOs’ performance in selected organizations in the Southeast and simply reported what had already happened.

Area of the Study: The area of the Study is South-East Nigeria made up of Five states, Abia, Anambra, Ebonyi, Enugu, and Imo states. These are the core Igbo-speaking in Nigeria who are trying to gain a competitive advantage in their businesses after losing almost everything during the Nigerian Civil War years back. Igbos are well-known for their business acumen. Thus, the high performance of the CEO in the companies is a welcome idea as they need to perform better to meet up with or possibly surpass their business counterparts in other parts of Nigeria.

Population of the Study: The population consists of all registered companies in the SE of Nigeria that have operated for over five years. This is to ensure that the CEOs must have operated for over three years in the organization. This is because studies have shown that a CEO’s performance can be observed only after three years of his recital (Dey, 2022). Earlier studies indicate that CEOs experience a significant increase in productivity after appointment, but this emerges gradually over time, taking three years for a new CEO to make a difference. Bandier, Prat, Hansen & Sadun. (2019).

 Sample and Sampling Techniques: A multistage, purposive, accidental, and snowballing sampling technique was adopted in selecting the participants used for this study. Following Chiaha’s (2023) determination of sample size from a given population, all five states in SE Nigeria were selected for the study. Secondly from the registered companies 340 CEOs were selected from the states. Thirdly, a purposive sample of the CEOs that have stayed in the organization for five years and above were selected, using accidental and snowballing sampling techniques. Finally, 128 CEOs were used for the study.

Instrument for Data Collection: Two instruments, a structured questionnaire titled ‘Imammadu (IM) Employee Recruitment Model and Chief Executive Officers’ Performance Questionnaire (IM-ERMCeoPQ) and an In-dept Interview Schedule titled, ‘Imammadu (IM) Employee Recruitment Model and Chief Executive Officers’ Performance Indebt (IM-ERMCeoPIS). The IM-ERMCeoPQ has two sections, A and B for collecting respondents’ demographics and items for answering the research questions respectively. The 35-item Questionnaire items were structured on five clusters in line with the research questions and on a 4-point Likert-type rating scale of, Strongly Agree (SA); Agree (A); Disagree (D); and Strongly Disagree (SD), and Very Large Extent (VLE); Large Extent (LE); Small Extent (SE); and Very Small Extent (VSE), weighted 4, 3, 2 and 1 respectively. The IM-ERMCeoPIS) was constructed by the researchers in line with the three research questions.       

 The instruments were subjected to face validation by three experts, two in Business Management from the Learn to Live Business School and one in Measurement and Evaluation, from the University of Nigeria Nsukka. The three experts were requested to ascertain the appropriateness and clarity of the items of the instrument to ascertain if it would measure what it purported to measure. Their comments, suggestions, and observations were taken into consideration in the production of the final draft of the instruments. The instruments were trial tested using 20 CEOs from Benue state, which is outside the study area. The internal consistency of the instruments was computed using the Cronbach Alpha method that yielded 0.85 and 0.77respectively for the two instruments.  The instrument was therefore regarded as reliable enough for the study.

Method of Data Collection: The researchers, with three other well-instructed research assistants on methods of data collection, administered the instruments to the respondents, while the researchers alone conducted the interview with the CEOs at the same time. A 96% return rate was recorded.

Method of Data Analysis: The data generated for the study were analyzed using means and standard deviation to answer the research questions. A criterion mean score of 2.50 was employed to arrive at decisions on researching the questions. This implies that any means below 2.50 was taken to mean NOT Accepted, while any means of 2.50 and above were accepted for the same reason. For the Extent of effectiveness, the decision was reached following Real Limits of Numbers as follows; Means between 0.00 to 1.49 imply a Very Large Extent (VLE):; Means between 1.50 to 2.49 imply a Large Extent  (LE); Means between 2.50 to 3.49 implies  Small Extent  (SE); and; Means between 3.50 to 4.00 implies Very Small Extent  (VSE)

           The hypotheses were tested using Analysis of Co-variance ANCOVA statistics at 0.05 level of probability. The significant level will be determined at a table value of 0.96. This implies that when the calculated value is below the table or critical value, it is declared Not Significant. Thus, the Null Hypotheses was ACCEPTED.  On the other hand, when the calculated value is higher than the table or critical value, it was declared Significant, thus the Null Hypotheses were NOT ACCEPTED.

Scope of the Study: The geographical scope is limited to organizations that have operated for over five years in SE of Nigeria. Those below five years were delimited. The content scope was limited to the CEOs’ perception of the IM employee recruitment model, in organizations in SE Nigeria; How the CEOs apply the IMemployee recruitment model, in organizations in SE Nigeria; the Effectiveness of the IM employee recruitment model, in organizations in SE Nigeria and Advantages and Disadvantages of IM employee recruitment model in organizations in SE Nigeria.

 Significance of the Study:  The findings of this study will be of tremendous benefit to organizations, CEOs, employers, and the State and federal governments of Nigeria, especially those of SE Nigeria and researchers. To the organizations, especially those in SE Nigeria, this study will serve as an illuminative evaluation of the CEO’s performance.  In the war on talent, the various government, organizations, other employers, and their CEOs will become aware of the implications of the IM recruitment model in their organizations and how best to apply it. Likewise, it will provide researchers with relevant literature for studies of this nature. It is a stepping stone to the development of a theory of recruitment that will further help employers and employees, as well as business managers in promoting the CEOs’ performance in organizations.

RESULTS AND FINDINGS:

Results: The analysis is based on 128 copies of the questionnaire successfully retrieved after completion out of 135 copies distributed. This represents a 94.81 percent return rate.

 The study’s results are presented below in Tables 1 to 8, based on the research questions and null hypotheses that guided the study.

IMAMMADU (IM) RECRUITMENT MODEL and CHIEF EXECUTIVEOFFICERS’ PERFORMANCE IN SELECTED ORGANIZATIONS IN SOUTHEASTNIGERIA. Read More »