CORPORATE PLANNING CHALLENGES AND PROSPECTS (A CASE STUDY OF DANGOTE GROUP OF COMPANY)

ABSTRACT

The research is on corporate planning; problems and Benefits, A case study of Dangote group of company Lagos.  The main objective of the research is to determine the problems managers encounter in corporate planning and thus suggest possible solutions. The researcher analyzed the data collected based on the responses from the questionnaire. Chi- square was used to test the hypothesis formulated. The major findings of the research shows that lack of reliable and adequate information, poor structural policy frame   work   and   lack   of adequate managerial skills and   technical   know   how   are   some   of   the   problems   managers encountered in corporate planning. Based on the above findings,    the study concluded  that  corporate  planning  covers every  aspects of  the organization as it sets long term goals for the organization and it is vital for the growth of the organization. On the basis of the above finding, the study recommends that there is the need for managers to always reassess the set goals in the light of the performance of the corporate plan   over- time   ascertain   if their   target   is   been achieved, and thus set their goals in the light of the prevailing circumstances, which is the essence of emergent approach in corporate planning.

CHAPTER ONE INTRODUCTION

1.1   BACKGROUND OF THE STUDY

The development of corporate planning in business is a post World War II  Phenomenon.  Before  the  period  of  the  World  War  II,  almost  all business  enterprises  were  carrying  on  their  business  affairs  without stating  any  formal  objectives  or  formal  long  range  business  plans. Usually  business  planning  was  confined  to  the  lower  organizational levels, mainly the functional or the departmental levels and they had only short-term plans which focused mainly on manufacturing product planning, materials ordering and receiving, and hiring of labor. Most companies  used  to  have  annual budgets  or yearly  financial  plans to ensure their liquidity Imaga, (2000:1).

Since that period of World War II, higher level that is at the core body of the company level long-range, usually of 3 to 7 years period planning has assumed ever increasing importance. The development of business planning has been a revolutionary movement or as the technological revolution or even the revolution in life-styles due to income demonstration effects from time to time. According to Hberts, (1950), comprehensive business planning now covers long-range in the form of

strategic planning involving the entire fabric of the organization and is the concern of the top-most management from where it descends to all. The scope of corporate planning covers not only the whole organization but every functional aspect of the organization. It takes into account the full environments in which the business operates and is a systematic assessment of a most comprehensive nature, leading to the realistic mapping out of long term  objectives,  strategic and  operational plans Akpala (1990).

In  corporate  planning,  top management  is concerned  with the future direction of the business as a whole, such decisions taken are long-term in   nature   and   are   bound   to   have   far   reaching   implications   on employment, the financing of the business and the types of products manufactured.

Thus, corporate planning involves major strategic decisions. It is against this background that this study is set to examine corporate planning with a  view  to  determining  its  benefits  and  identifying  its  problems  in Dangote Group of Company Nigeria Limited.

1.2   STATEMENT OF PROBLEM

Corporate planning often fails to achieve it’s objectives in many organizations  due  to  some  Militating  factors.  The  problem  of  poor

planning which are usually defective due to lack of skills and expertise and  reliable and  accurate  information on the sides of the managers, which will often leads to poor forecast and formulation of vague goals and objectives. Also poor policies and implementation strategies is yet another problem which in most cases leads to deviation of results from the sets goals, and poor feedback.

Finally,  the very dynamic  nature of the  business environment which makes forecasting practically impossible,  some times Jeopardizes the organizational policy. Lack of effective monitoring of plan implementation and review of results usually undermine even the most articulated corporate plan.

1.3    OBJECTIVES OF THE STUDY

The    specific   objectives   of   the    study   include   the following:

1.      To determine the problem manager encounter in cooperate planning and suggest solution.

2.      To determine the strategic planning approach used by organizations and assesses its appropriateness.

3.      To evaluate forecasting methods used by corporate organizations.

4.      To determine the corporate planning approach use by organization.

1.4    RESEARCH QUESTIONS

The following researcher questions were asked to elicit useful information to be able to deal with the subject matter.

1.      What   are   the   problems   managers’   encounters   in corporate planning?

2.       What are the strategic planning approaches used by organizations and how appropriate are they?

3.       What are the forecasting methods used by corporate organizations?

4.      What are the corporate planning approach uses by organization?

1.5   RESEARCH HYPOTHESES

H0: The problems managers encounters in corporate planning does not include lack of adequate and reliable information, poor structural policy framework, lack of adequate managerial skill and technical know-how.

H1:  The  problems  managers’  encounter  in  corporate  planning  does include lack of adequate and reliable information, poor structural policy framework, lack of adequate managerial skills and technical know-how.

H0: The strategic planning approach used by organization does not include analyzing the current status, examining the prospects of the future, setting the future course of strategy, putting a strategy to work, and evaluating and controlling strategy.

H1: The strategic planning approach used by organizations includes analyzing the current status, examining the prospects of the future, setting the future course of strategy, putting a strategy to work, evaluating and controlling the strategy.

H0:  Historical trend analysis, quantitative methods, Brain storming, etc are not forecasting methods used by corporate organizations.

Hi:    Historical    trend    analysis,     Quantitative    methods, Brainstorming,   etc   are   forecasting method used by corporate organizations.

H0:  The corporate planning approach used by organizations does not include prescriptive and emergent approach.

Hi:  The corporate planning approaches used by organizations    include prescriptive and emergent approach.

1.6   SCOPE AND LIMITATION OF THE STUDY

The study is on corporate planning: Problems and benefits. A study of Dangote  Group  of  Company.  The  major  constraints  of  this  study include;

1.      Time Constraints: Due to limited time given for the study, the researcher could not visits places where relevant information necessary for the study could be obtained.

2.      Financial Constraints: The researcher has not enough money to embark on an in depth study of this magnitude. Because of financial constrain the researcher could not visit places where necessary information needed for the study could be obtained.

3.      Attitude of the Respondents: Some of the respondents were not interested in the questionnaire given to them because they feel they have nothing to benefit from the study.

1.7   SIGNIFICANT OF THE STUDY

This   research   derives   its   significance   from   it’s   usefulness   to management of small and big organization, governments and students. This work will be of great importance to the following group of people. The potential and prospective managers might find this work useful as a guide to  better business initiative and  management towards ensuring proficiency, efficiency and effectiveness.

1.      The policy making arms of the government could also appreciate this work and thus make good policies in favor of corporate planning development in Nigeria considering the role it plays in Nigeria economic development.

2.      Other researcher could as well find this work very useful   for further research work as a reference material.

1.8   BRIEF HISTORY OF DANGOTE GROUP OF COMPANY Dangote group of company was founded in 1977 with the formation of Alco International Limited. Subsequently Dangote Nigeria Limited was incorporated during the 1980s and 1990s, the group ventured into the importation of sugar, milk, flour, fish, rice, cement and iron rods, later, the group  embarked  on the  haulage  business,  which  started  with 60 struck under Dangote transport.

Dangote  industries  limited  was  incorporated  in-order  to  sustain  the groups market leadership in trading commodities and  to expand into manufacturing of food, clothing and build materials,

Focus was placed on the following; sugar refining, flour milling, pasta production,   salt   processing,   bulk   cement   bagging,   oil   and   gas exportation, real estate, propylene bag manufacturing, haulage, textiles, maritime operations and telecommunications. The Dangote Group includes the following subsidiaries:

1.       Alco International Limited

2.       Dangote flour mills Plc

3.       Dangote Cement Plc

4.       Dangote Transport Limited

5.       Dangote Sugar Plc

6.       Dangote Oil and gas industries international

7.       Dangote Textiles Limited

8.       Blue Star Limited

9.       Dangote Holding Limited

10.     Dansa Food Limited

1.9   DEFINITION OF TERMS

1.      Corporate Planning: This is decision support systems that holds and derives knowledge  relevant to  planning  decisions that cut across organizational units and involve the entire fabric of the organization and is the concern of the top most management from where it descends to all, Karl (1998:14).

2.      Management:   This   is   defined   as   the   process   by   which organizations   resources   of   men,   material   and   money   are combined in such a way that goals and objectives of the organization  are realized in  an  effective  and  efficient manner, Akpala (1990:44).

3.     Corporation: This is a mechanism by which different parties contribute capital, expertise, and labuor to achieve mutual benefit.

4.      Corporate  Culture:  This  is  the  totality  of  the  shared  beliefs,

values, norms and expectations by organizations members which are transmitted from generation to generation.

5.      Planning:  This  is  the  act  of  determining  in  advance  possible future work of actions.

6.     Strategic Management: This is the process by which top management determine the long run performance of the organization by ensuring careful formulation, proper implementation and continuous evaluation of the strategy.

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