An Assessment of the Management Performance of Public Enterprises in Nigeria

AN ASSESSMENT OF THE MANAGEMENT PERFORMANCE OF PUBLIC ENTERPRISES IN NIGERIA(A CASE STUDY OF ENUGU STATE TRANSPORT COMPANY LIMITED)

The Enugu State Transport Company (ENTRACO) like any other transport company is a service oriented company. The company owns its origin to the federal government mass transit programme established in 1988 by regime of president Ibrahim Babangida in an effort to emeliorate the transportation hardship faced by the Nigerian masses, which was brought about by the federal government Economic poicy of structural Adjustment Programme (SAP).

ENTRACO as known and called today Came into existence as a result of the creation of Enugu State old of the former Anambra State in October 1991. With this creation, Enugu State started its own transport service from their share of buses from TRACAS, which was the original transport service by them; subsequently, the federal  government supplied initial capital in the form of  polling stocks (supply of buses). As a result of this, the federal government has the controlling share in the company precisely sixty percent (60%) while the same government and the company management has forty percent (40%).

ENTRACO is operating about fifty- one (51) fleet of vehicle out which the company owes thirty-nine (39) and holds twelve (12) in lease.

It has four departments comprising Administration finance, operations and engineering.

Each department is being manned by assistant general manager while the divisional manager of each department report directly to the area manager of their respective departments.

The company has a multi-million-naira machine base workshop at Emene which was established to continuously keep their vehicles in other to avoid over expenditure in the hands of hire mechanics.

On the route of operations, the company concentrated in plying the capital cities where work reside and rural areas, where foodstuff are produced.

Areas like Abakaliki, Nsukka, Agwu, Nkanu, Onitsha, Awka, Port-Harcourt, etc are served.

According to the transport manager, it is only the operations department that visibly under takes the commercial activities of the company under the department, there are two sections.

The deports are the revenue centers.

There are the loading sports for passengers.

The company has about ten depots with all its functional areas teach can have as many as five loading boys meanwhile, the Engineering department is limited in its functions to the maintenance an minor reconstructions of the company’s  vehicles.

Organizational Structure

Board of directors

  • SCHOOLS OF THOUGHTS WITHIN THE SUBJECT AREA

In any organization both private and government owned there are lot of management problems performances. The research in the related literature within the subject area intends to discuss the opinion of authors on this subject.

Okafor(1989) pointed that government owned companies feature greatly by the  interference of government.

The nature of the companies he argued shows that the owner that is the government has concentrated the authority in its hand and appoints team of management to implement the objectives and aims which are not clearly defined whether government in business or government in charity.

According to a senior officer interfered in the appointment of officers of the company from chairman through general manager and other staff.  Not only are unqualified workers appointed in some case making the company get over staffed.  He further observed that recent exercises carried out in the company revealed that a lot of these in pay roll are ghost workers.

Another senior staff interviews stated that in Enugu state Transport Company limited, Sycophancy becomes the order of the day for members of the board to retain their membership.  He argued that labour is politically imposed on the management no matter the training and experience of workers. All board members, political and ministerial dignitaries are involved in making appointment of senior staff and other categories of workers.  He concluded that political leaving and support becomes more important than experience resulting in the tendency for non – executive chairman to using the powers of the managing director, thus resulting into power struggle on who should actually run the organization. Maduike (1993) observed that politics has been a problem in government owned companies. He argued that experience has shown that several dissolutions/appointments of new management has lead to non-continuity and non – performance of management in a frequently changed management is attributed to the fear of being dissolved. Supporting Maduike’s view a senior staff of Enugu State Transport Company stated that there is neither job satisfaction nor job security in the company.

He argued that management cannot take efficient decision because of the government interference. This he concluded placed emphasis on what they can make out of the company instead of bring ideals that would contributed to the growth of the company.

Ibie (1988) attributed management performance in government owned companies to lack of continuity especially in the area of human resources.

He buttressed his argument to a situation where after training a person, he is made redundant or thrown out of job due to office politics. In like manner Olisa (1993). Pointed out that one major factor contributing to the poor performance of management in government owned companies is the lack of continuity in policy and practices (style). Polices and practice according to him is tied too closely to the personalities or management that formulated the fact of those policies depends on many cases of personal relationship between a success or and his immediate predecessor.

He argued that the new management may refuse to inherit any liability although may inherit the assets.  Even in staff matters, hand working staff he pointed out may languish because a “pharaoh that known not Joseph has taken over”.

Ejiofor (1977) pointed out that the survival or government companies depends much on the ability of Board management and staff to continue working together as a team to reduce wastages, block leakage and improve on productivity and efficiency in order to sin vie m maintain such sustain a profitable growth and development of the company into the future similarly.

Ofora (1977) stated that the new capacity utilization persists in the industries of undesirable consequences for the economy in general. Apart from slowing down industrial growth it might lea to the total collapse of some companies. The on – going situation also has serious implication for reducing employment opportunities.

In his own contribution, Ubeka, (1975) pointed out that the story of management is the same every where, nepotism, graft, bribery, corruption

Embezzlement of company funds conversion of company property to personal use, command appointment payment of salaries to ghost employees, award of contracts to shady contractors or company in which officials have interests, profit sharing with suppliers usurpation of powers subordinate, flowing of laid down regulations and procedures in short doing all the don’ts of flood management.

Owodum (1992) in his paper “Accountability and public control of public corporations. Experience of western Nigeria observed that majority of board members (of public institutions) have in the past tended to behave in a manner calculated of retain the pleasure of responsible ministers, often at the expenses for high integrity and devotion to public interest. In the same vain Bartholomew (1994) noted that inadequate funding and forward planning are problems for management. He maintained that some government companies are set up without adequate financial provision being made for effective functioning. He pointed out that frequent re-ordering of priorities of different government also affects the cash flow of many companies.

As a result the construction of some projects. Takes too with the result such companies start over geared and over burdened with debt.

Because of this, inadequate forward planning or plan implementation is apparent.

Performance of Government owned companies

Ejiofor (1994) stated that one of the most promising tool of management appraisal so far developed is the system of evaluating managerial performance against the setting and accomplishing of measurable objectives, troom’s performance model defined performance as a multiplicative function of motivation and ability represented by the relationship P- F           (M And A) where P, M and A are performance motivation and ability respectively.

With further study and research, the Nigeria economic environment.

Ejiofor expanded this model to include the elements of integrity and instrumentality.

Emphasing the Nigerian public service he argued the failure for public sector organization to perform was as a result of officers not wanting to manage property nor on their inability to do so, since thus involved sacrificing elict gains through corruption. He also shows that managers would perform if the regard as a result at this performance were instrumental

To effort put into the job. The study assumed that without integrity in management and perceived instrumentality whereby there is a casual relationship between effort and reward that would exist a missing link between performance and result.

According to Ijeoma (1994) for performance to be meaningful, it has to be weighted against its antecedent or the expectation which gives rise to performance, it is after identifying these performance expectations that one can determine whether the actual performance has measured up to the antecedents expectation. Then to determine the expectation, one would look at the different interest groups who have expectation regarding the establishment of these companies.

  1. The government / tax payers.
  2. Management team.
  • Supervisor /Regulatory ministry (s)
  1. General public

The government is interested not only in the quality and quantity of product / service but also in the financial standing of these companies to become self – sustaining. Profitable, the value of product which the companies provide for the general citizenry.

This interest differs from that of the private entrepreneur who ha profits maximization as against the governments, socio- economic and political objectives. The government/ tax payers are there owners/ the providers of capital for there companies and the return on the investment by way of prices of the products and profit reserves.

Hall (1975) observed that management and employee management is a prime determinant of the nature and direction of organizational process.  Top management specifically determines the strategic, focus of their company and put in place the policies and programme for achieving the objectives. Organizational processed in the government owned companies he noted have so for generally not met socio-economic expectation because of the poor quality managerial team in these companies. Lack of training and development programmes for the staff.

The government should give greater recognition to the managerial element as a primary determinant of corporate success. Both the management and lower level employees have performance expectation.

They should therefore be educated as to their own role in creating the necessary environment for their expectation to be met by the companies.

The further pointed out that the supervision / regulatory ministry (s) are concerned with compliance with government guidelines and policies provision, good quality of management, social, economic responsibility and security of government funds.

He finally concluded that the main expectation of the general public from the government owned companies has to do with products, servicing prices and costs in these companies, innovations and responsiveness to consumers demand. In order for the general public to develop the appropriate expectation, they have to be educated on the basic objectives for establishing government companies, the right to patronize the products/ services, prompt payment and loss prevention.

After looking at the expectation of the interest groups, the researches still believed that there are other problems that affect the management performance of government –owned companies in Nigeria. These include:-

  1. That Enugu is a developing economy.
  2. That government ownership of companies is relatively young compared with other manufacturing and marketing enterprises.
  3. The current global economic crises.
  4. The political and cultural set up which lead to management problem which is the subject matter of today’s government – owned companies.
  • THE SCHOOLS OF THOUGHT RELEVANT TO THE PROBLEM AREA.

This subheading will be discussed under four parts namely:- who is a manager, causes of management problems, the effects of these problems and the performance of government – owned companies.

Who is Manager?

According to Udeze (1993), managers are people who take decision at various levels of any enterprise hierarchy.  In his own contribution, Hunte (1992) says that a manager is a leader of a good organized for the production of goods and services.

Ofora (1977) pointed out that the managers main activity is getting things done with given facilities/ resources (man and materials) to achieve determined goals and objectives. The manager translated thoughts, ideas or wishes established by the governing body into practical realities.

He argued that the function of a manager includes planning, organizing, directing, controlling and evaluating in any business undertaking. He concluded that the manager uses this functions/ process to achieve the basic obligation to those whom he managers and the general public/community in which he operate.

According to the American Institution of management is used to designate either a group of functions, or personnel who carry them out, it is also used to describe either a company’s official hierarchy or the activities of men who compose it.

He concluded that management connotes people and process.

Ubeku (1975) stated that management is the co-ordination of all the resources of a company through the process of panning, organizing, directing and controlling in order to achieve the companies objective. Again management is a process of combining and utilizing or of allocating a company inputs (man, materials and money) by planning, directing and controlling for the purpose of producing output (goods and services) desired by customers so that the company’s objectives are accomplished.

He notes that in the process, work is performed through the company’s personnel in an ever-changing companies environment. He concluded that those who carry out these activities as defined above carry out these activities as defined above are called management or manager.

Beike (1994) Stated that management should be specialists in their own jobs as well as generalists in order to cope successfully with the complex business environment they must also process the spirit of team work and they must be able to influence, motivate and induce people to accomplish company’s satisfaction of individual’s need. Therefore spirit of teamwork as they co-operate with managers from different departments.

Koontz and O’ Donnel (1976) defined management as the accomplishment of desired objectives by establishing an environment favorable to performance by people operating in organized group. Supporting this assetion Leutt (1976), Said that management consisted of the rational assessment of a solution and systematic selection of goals and purpose  (what is to be done) the systematic development of strategies to achieve these goals, Marshaling of required resources to attain the selected purposes and finally the motivating and rewarding of people to do the work.

It is quite evident from the researchers view point that all other times, it is the goals to be attained a well as the resources for attaining them yet at other times, the function are emphasized in which case management will be essentially concerned with the use of available resources to attain a pre- determined goal which therefore necessitates performing certain function.

Causes of Management Problems

According to Eze (2002), in buses, money is said to be the life wire of any business.

In fact no organization can function effectively without adequate and as well as resourceful financial base to meet up with the day-to-day running of its operations or activities.

He argued that the financial manager should always make sure that the allocates procures, fund as required by the organization. These tasks have not always been easy to come by especially in government owned business where buregrarcary and nepotism are the order of the day. He concluded that ENTRACO has not performed owing to lack of enough money / fund to buy all the necessary equipment and in the acquisition of more fleets of buses, so as to meet up with demand of its customers.

Another senior staff of ENTRACO stated that there has not been enough experienced and qualified administrator who would handle the affairs of the company more effectively. He noted that only when this problem is taken care of could we expect favorable result in operation.

He argued that management could also proffer a long-term solution by sending their staff on training course. Sometimes, staff may be allowed to take leave without pay or leave with pay for a period of time.

This he concluded would inject more qualified personnel in the establishment.

Okafor (2002) pointed out that poor planning has always been a serious factor in failure of most organizations. This is because as the saying goes that failing to plan is planning to fail. He stated that a good manager should make adequate plan of his policies and programmes. He should be able to carry out prompt and firm decision affecting his establishment. He concluded that improper planning lead to constant prosponement of decision thereby promoting unhealthy atomosphere.

Okafor (2002) further stated that since the introduction of the mass transit programme by Babangida;s administration, a lot of institutions have resorted to this kind of arrangement in their bid to provide transportation services to the  people at the moderately reduced price and still adhere to their profit goal. He argued that in Enugu State the presence of Transport Corporation of Anambra State. (TRACAS), Nsukka local govt,masstransit, and peace mass transport can easily be noticed. He noted that as a result of this aggressive and cutthroat at competition, the company could not perform as expected. He states that this however, has promoted the efficiency and innovations such as quality services.

Customers he noted now have television and video sets to which waiting for buses to convey them to their various destinations.

He finally noted that the unhealthy completion that has entered the system has reduced the general turnover of the company as well as its profit thereby affecting the general performances of the company.

Okeke (2002) stated that the Enugu State Transport Company like any other enterprises has been exposed to a lot of political engineering both in appointment of top management team, Board of directors and even in recruitment of line staff.

This he pointed out has affected the company drastically because a situation where party loyalists are appointed to the detriment of qualified and experienced personnel may not be in the interest of the company. He stated that in most cases, merit is sacrificed to favouring of party member who do not understand the working of the government. This may explain why the first executive Governor of Enugu states. His Excellency Chief Dr. Okwesili Eze Nwodo called for triangular equilibrium and merit quota racy in appointment to balance the work force among the three zones of the state without sacrificing merit.

Consequently, because members of the Board of Directors and some times the general manager are the members of the party, company fund are siphoned, while trying to pursue party interest. This is the usual practice in the civilian regime.  A situation where the Governor decides to direct vehicles belonging to the state mass transit to convey party members to the venue of a political rally during the presidential election campaign can drastically affect the company’s profit.

In some other cases, the General manager and other line staff collude and print their own ticket which they sell to the members of the public. Again excessive overhead cost in believed to have contributed in the reduction of profit of the company.

A senior staff of ENTRACO Ltd. Pointed out that the constant change in the leadership of Enugu state transport company (ENTRACO) Ltd. Has helped in worsening the performance of the company.

He stated that between 1992 and 1996 alone, about four general managers and sole administrators are known to be appointed. Such an unhealthy nary he concluded does not ensure stability and growth of the company.

  • DIFFERENT METHODS OF STUDYING THE PROBLEM

The determination of methods and procedure a researcher adopts for purposes of his investigation is very vital for the successful completion of a study of this nature.

Similarly, the procedure adopted in research report is very important since it gives the reader background information on how to evaluate the findings and make conclusions.

Research Method used

Method employed in the study is survey, Data will be collected through questionnaire and interviews.

Source of Data

In carrying out the research, the researchers used both primary and secondary source of data.

The primary data were sourced from questionnaire and personal interviews to the management and personnel of ENTRACO. Enough opportunity were given to allow them to release as much information as possible, through asking them questions that need detailed answers and exchange of ideas relating to management procedure.

Also used, as data were secondary data obtained from newspapers, magazines Journals, Seminar papers and reward in the company’s record books.

The final source of information was through observation of the factors which either hinder or boost efficiency in management performance in government owned companies their natural environmental setting.

Data Collection Procedure

In carrying out a research of this kind, decisive information that will help one come up with a realistic result with particular reference to the study has to be developed.

To this extent, the researchers, distributed questionnaires, conducted oral information.

The questionnaires were collected on the spot from the members of staff of ENTRACO who answered the questionnaire.

Population / Sample size

Out of a population of 300 employees in ENTRACO, one hundred were chosen as the sample size which the questionnaire were administered.

A Random Sampling Technique was used to select the sample size.

Data Analysis

A Simple percentage technique was used as instrument for analyzing the data collected.

 

2.5     SUMMARY

The study was armed at reviewing the related literature on the managerial appraisal of Enugu state, transport cooperation (ENTRACO), in this review, some manifest problems of government owned companies were identified. The literature reviewed included the history of the company and the organizational structure showing the line of authority in the company.

Consequently, the review looked at the manifest problems that contribute to the poor performance of the company and also the performance of state – owned companies.

Finally, the different methods of studying the problem were highlighted.

These include research method used, sources of data collection procedure, population/size and method of data analysis.

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