IMPACT OF STRATEGIC PLANNING ON ORGANIZATIONAL PERFORMANCE

(A CASE STUDY OF NIGERIAN BOTTLING COMPANY) 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Business environment is increasingly and constantly changing. There is therefore uncertainty about the future as new situations such as technological advancement, new societal trends, new economic forces or newly enacted government regulations emerge.  Nigerian Bottling Company Limited also operating in markets where competition is keen and many large competitors are present. In order to survive in a dynamic and fast changing turbulent environment and therefore succeed in competitive markets, an autonomous government institution must diagnose the changing situation or circumstances and accordingly put in place strategic measures.

Very simply put, strategic planning identifies where the organization wants to be at some point in the future and how it is going to get there. The "strategic" part of this planning process is the continual attention to current changes in the organization and its external environment, and how this affects the future of the organization.

Strategic planning is a set of managerial decisions and actions that determine the long-term direction and survival of an organization. Strategic planning is also the activities that lead to the statement of goals and objectives and the choice of strategies to achieve them (Dubrin, 1998).  It is typically concerned with fundamental decisions about the future of the organization.

However, formulating and implementing a strategic plan should not be the end of strategic planning.  Nigerian Bottling Company Limited and other organizations need to know the impact or effects of strategic planning on the organizational performance. The impact or effects should be measured not only in terms of typical output-oriented quantitative indicators, but also in terms of qualitative impacts of the strategic planning process or activity itself. Measuring the impact of strategic planning in this direction will enable management to know whether the resources devoted to strategic planning are worth their value or not.

The literature on the impact of strategic planning has increasingly and exclusively dealt mostly with profit or financial payoffs (Ramanujam and Venkatraman, 1987). Indeed, there has been little or concern on measuring other qualitative aspects of the impact of the strategic planning and the planning process itself on performance of organization such as Nigerian Bottling Company. In other words, the act of engaging in strategic planning is as valuable as the ultimate strategic document and these needs to be measured.

The present study has been stimulated by this idea of measuring the qualitative impacts of strategic planning on performance the Nigerian Bottling Company Limited. 

1.2 STATEMENT OF THE PROBLEM

Past and recent research studies have made it clear that there is an increased internal and external uncertainty due to emerging opportunities and threats, lack of the awareness of needs and of the facilities related issues and environment and lack of direction.

Many organizations spend most of their time realizing and reacting to unexpected changes and problems instead of anticipating and preparing for them. This is called crisis management. Organizations caught off guard may spend a great deal of time and energy playing catch up. They use up their energy coping with immediate problems with little energy left to anticipate and prepare for the next challenges. This vicious cycle locks many organizations into a reactive posture.

This research study is to assess the impact of strategic planning on organizational performance, which at the long run enhances organizational survival.

The first planning-performance studies emerged after the rapid expansion of formal strategic planning in the 1960s (Henry, 1999). Although the studies employed diverse methodologies and measures, they shared a common interest in exploring the financial performance consequences of the basic tools, techniques and activities of formal strategic planning, i.e., systematic intelligence-gathering, market research, SWOT analysis, portfolio analysis, mathematical and computer modeling, formal planning meetings and written long-range plans.

1.3 OBJECTIVE OF THE STUDY

The following are the objectives of the study

1.     To investigate the impact of strategic planning on the performance of organizations

2.     To give a structural analysis of the concept of strategic plan

3.     To examine the relationship between strategic planning and organizational performance

4.     To observe the organization under study and it performance resulting from strategic planning

5.     To examine the advantage and the cost involve in strategic planning

6.     To examine the consequences of lack of strategic planning in organizations.

7.     To assess the qualitative impact of strategic planning such as team building, common understanding of Programmes, managerial decision making, organizational goals implementation, etc on the performance of Nigerian Bottling Company.

1.4 RESEARCH QUESTION

1.     Does strategic planning have positive impact on organizational performance?

2.     Does Nigerian Bottling Company Plc involve in strategic planning?

3.     Do most company plan for the future market growth?

4.     Is there any plan against competitors by most organization?

5.     To what extent are management and workers involved in the implementation of strategic planning process in most organizations?

1.5 HYPOTHESIS OF THE STUDY

HYPOTHESIS ONE

 Ho: Strategic planning does not impact organizational performance         positively

Hi: Strategic planning does impacts organizational performance      positively.

Ho: There is no significance relationship between strategic planning         and organizational performance

Hi: There is a significance relationship between strategic planning   and organizational performance.

Ho: Good fore sight is not required in strategic planning in     organizations

Hi: Good fore sight is required in strategic planning in organizations.

1.6 SCOPE OF THE STUDY 

The scope of this research work focused strictly on the impact of strategic planning on organizational performance using Nigerian Bottling Company Limited as a case study. This work will lead us to the concept of strategic planning and the process of strategic planning. 

The area covered in the research work is limited to Bottling Company Limited, Benin City, in which the population of the study and the sample size of the study were obtained.

1.7 LIMITATIONS O F THE STUDY

On the course of this research, the following problems were encountered, like short time frame. Financing problem, scarcity of information or data, etc. this is due to mainly, the wide scope of this study which emphasizes on a complex institution like Nigeria.  Now, the implication is that the short time frame mapped out for this research work posed a problem of assessing these programs as whole, but that doesn’t threat the authentication and quality of this work.

Again, enough finance for the accomplishment of this work became a problem in the sense that gathering information was costly, the researcher needed enough money to gather them.

1.8 SIGNIFICANCE OF THE STUDY

This research work will help the organizations and managers to understand those benefits that strategic planning embodies which most organizations have neglected and ignored in the past. In understanding this on the side of the organizations, it will allow them to rethink and work towards a qualitative strategic planning in order to enhance and increase the performance of the organizations.

1.9 DEFINITION OF TERMS

1.     Planning: Planning (also called forethought) is the process of thinking about and organizing the activities required to achieve a desired goal.

2.     Planning involves the creation and maintenance of a plan. As such, planning is a fundamental property of intelligent behavior.

3.     Forecasting: Forecasting is the process of making statements about events whose actual outcomes (typically) have not yet been observed. A commonplace example might be estimation  of some variable of interest at some specified future date. Prediction is a similar, but more general term. 

4.     Strategy: Strategy is a high level plan to achieve one or more goals under conditions of uncertainty. Strategy is important because the resources available to achieve these goals are usually limited.

5.     Productivity: this can be defined as efficiency with which work is done, the amount of work done in a certain work.

6.     Organizing: this is determined of activities that need to be done in order to reach the activities to the proper personnel.

7.     Responsibility: this is the duty to perform certain assigned tasks in a satisfactory manner.

8.     Management: The organization and coordination of the  activities of a business in order to achieve  defined  objective.   Management is often included as a factor  of production  along with‚ machines, materials, and money. According to the management guru Peter Drucker (1909-2005), the basic task of management includes both marketing and  innovation. 

9.     Organization: A social unit of people that is structured and managed to meet a need or to pursue collective goals. All organizations have a management structure that determines  relationships between the different activities and the members, and subdivides and assigns roles, responsibilities, and  authority to carry out different tasks. Organizations are open systems--they affect and are affected by their environment.

1.10 HISTORICAL PROFILE OF NIGERIAN BOTTLING       COMPANY (NBC)

The Nigerian Bottling Company Ltd is one of the biggest companies in the non-alcoholic beverage industry in the country and is the sole franchise bottler of The Coca-Cola Company in Nigeria.

The company serves approximately 160 million people by producing and distributing a unique portfolio of quality brands, bringing passion to marketplace implementation, and demonstrating leadership in corporate social responsibility.

NBC Ltd started operations in Nigeria in 1951. Based in the city of Lagos, they operate 13 bottling plants across the country. In addition, they channel products through 59 warehouses and distribution centers.

The company employs about 4,800 people and indirectly supports the jobs of up to more than a million more in our value chain.

The company aims to be our customers’ most preferred supplier, and conduct programmes to support more than 450,000 customers who sell our products to consumers.

The company is part of the Coca-Cola Hellenic Group, one of the largest bottlers of the Coca-Cola Company’s products in the world, and the biggest in Europe. Coca-Cola Hellenic operations span 28 countries, serving more than 570 million people. The company is headquartered in Athens and listed on the Athens, New York, and London stock exchanges.

The company produces, sells and distributes a wide range of beverages, most of which are trademark products of the Coca-Cola Company. The company product’s portfolio consists of:

• leading brands Coca-Cola, Coca-Cola light, Fanta and Sprite
• local brands such as Schweppes, Five Alive, Limca and Eva

The company continuously reviews opportunities to expand our product portfolio in order to offer consumers in Nigeria an increasing range of choices. Every measure is taken to ensure that the company’s products are of the highest quality.