EXPANDED PROFIT MOTIVE AS A FUNDAMENTAL FACTOR FOR FAILURE OF ENTREPRENEURIAL EFFORTS

ABSTRACT

Many factors have been fingered and blamed for low productivity of Nigerian economy,  prominent  among  which  is  the  weak  industrial  base.    And  this weakness is indicated by the low level of the index of capacity utilization in the manufacturing sector and general high rate of business failure in Nigeria. Having  considered  the  problems  from  the  accounting  point  of  view,  the researcher formed an opinion that EXPANDED (OR QUICK) PROFIT MOTIVE is a fundamental factor for failure of entrepreneurial efforts; this opinion considers the proper management of available resources – especially financial resource – as a primary factor that will make for success of a business venture. This expanded profit motive manifests in various forms, which include (a) lack of compliance to loan repayment schedule, (b) venturing into business without business ideas. (c)  Over-pricing of products, (d) Employment of unskilled labour and high labour turnover etc. But whatever form(s) such manifestation may take, ultimately they culminate into poor discharge of business functions. Accordingly, this research was driven by the investigation and assessment of various manifestations of Expanded profit motive as to establish the truth or otherwise and the extent of their contributions to business failure.   The investigation was carried out on the basis of five (5) stated hypotheses about which the research revolved. Besides the data collected from ALO Aluminum Company inform of responses obtained from questionnaires, the researcher visited some other establishments which are considered to be in position to have a store of data and numerical information that would have been useful for comparative analysis. Those organizations visited did not permit the researcher to avail the required data, and this made it difficult to use standard statistical technique, such as correlation coefficient and distributions in the analysis of data.   Consequently, the researcher resorted to the use of simple percentage, published and verbal information as basis for conclusion.   The research result suggests that every rational business owner/manager should strike a balance between profit motive and need for business survival.

CHAPTER ONE

1.1:  BACKGROUND TO THE STUDY

Since I became an accounting student and gradually came to be deeply sensitized on the issue of business management theories and practice, I became generally interested in studies related to Entrepreneurial Development, but particularly excited at the enquiries into the causal factors of both success and failure of Entrepreneurial Effort.

The desire for this enquiry is partly driven by my personal aspirations but mainly sustained by what I consider as easily observable poor state of private sector of Nigeria economy, poor contribution of this private sector to the growth of the economy and poor state of industrial development in Nigeria.

All these, by extention, mitigate the  national quest for job creation with the attendant well known negative consequences for the socio-economic wellbeing of Nigerian Nation. In this present research effort, I would generally discuss the importance of a widespread culture of entrepreneurship business actions in  the  establishment and  sustenance of  a  private  sector driven economy especially in this introductory chapter.

The investigation proper is intended to seek and reveal the causes of failure of most of the entrepreneurial efforts and focus particularly on the extent of the contribution of ‘Expanded profit motive (objective)’ to the failure of entrepreneurial ventures (small/medium business).

Looking at the present nature of the economy of Nigeria more holistically many concerned economics and business management scholars have received with great concern and lamentations, the present near total reliance on export of crude oil and raw material as sole source of sustenance for the economy. For this, the economy lacks in strength (viability) and stability since it is being operated without the requisite viable technological and industrial base.

For  many  years  running  now,  Nigeria  has  expressed  and preached her desire to achieve some scientific and technological feat which will help her effort to industrialize. It is to be acknowledged that the effort is still on-going, though at a very slow pace. But in keeping with the opinion of Animalu (2000; iii), for Nigeria to return to the (right) course, we (Nigeria) shall begin with a statement of the problem of development in the contemporary world (Nigeria) in terms of the concept of a plan perspective cycle of a modern society which relates (military) security to  political stability, political stability to economic  strength,  economic  strength  to  scientific  knowledge, scientific knowledge to technological know how) to (military) security. “The  different  between  an  industrialized  and  a  developing society is shown to lie in the degree of establishment of the plan perspective cycled in the society and to be the underlying principle behind  the  current  strategic  planning  methodology  in  Science, Engineering and technology (SET)-driven enterprises..”.

“On August 19,1999, the united Nations Development programme (UNDOP) launched its 1998 and 1999 Human Development Report at Nigeria’s Federal Capital Territory, Abuja. With  an  overall  Human Development Index  (HDI)  i.e.  longevity, education and income of 0.400; Nigeria ranked 137th out of a total of 174  countries  in  the  world  in  1993.  Speaking on  the  occasion, President Olusegun Obasanjo stated that the problem before the new democratic  administration of  Nigeria  is  to  fine-tune  policies  and programmes to ensure a balance between macro-economic stability and human centered development. Observing that poverty is the denial of  choices and  basic  opportunities to  live  a  tolerable life materially, psychologically, politically, socially and culturally (and) he declared that ‘policies must not depend solely on market forces—’

“Our task— is to conceptualize, analyze and proffer solution to myriad of problems, by examining how other countries have performed in trying to achieve our own higher HDI through industrialization and what we must do to achieve our own. Industrialization is about manufacturing of product by companies that empower people economically by offering them employment. Therefore industrialization relates to how people in a society are organized for productive work which impacts on the society’s quality of life. Technically speaking, industrialization is a product of manufacturing technology and industrial engineering—.

To a very good extent, “the fact that Nigeria has not been able to produce the required organization for industrial take off is largely and rightly blamed on our leadership or— on the  (neo-colonial) political organizations that  we  have  inherited from  our  erstwhile colonial masters and the war leaders of the post-independent military dictatorship era. We shall conceptualize this type of organizational problem by an inverted pyramid (see fig 1.1) signifying an unstable system, on its head (military dictatorship) which despite all types of promises of change, has produced in the end only (a) fiscal indiscipline (b) corruption and daunting national debt burden (c) religious intolerance and ethnic strife (d) labour unrest and cultism, ignorance and disease, comprising the four vertices at the base of the inverted pyramid.

In line with the above analysis Ugwoke (Lecture on Historical Development of Public sector Accounting) had explained, —with oil Boom of 70s, Nigeria had to engage in export of crude oil in very large quantities. During the period, Nigeria found itself with so much wealth that people abandoned private sectors for public sector.

Also during the long military rule the public sector continued to grow as every body wanted to sell to the government where money was, unlike the private sector. It was such that everybody abandoned the private sector and queued behind the military.

Within this dispensation corruption rose  to  the  stage where people now relaxed and amassed wealth. This further reduced the size of private sector as more people preferred taking one post or the other in government to engaging in private productive (economic) ventures.

The major macro-economic consequences of these problems according to Animalu (op cit) are;

(a) drastic decline in production of goods and services as a result of;

(b) low  capacity  utilization  of  privately  owned  manufacturing outfits or out right cessation of operations (of such outfits) and

(c) Huge external debt burden.

The beginning of the (era of) Industrial Revolution which is usually put at 1770 has the remarkable feature that it began initially in the village (rather than in Universities or Research Institutes). The men who made it were craftsmen-the millwright, the watchmaker, the  canal  builder  the  blacksmith  and  its  characteristics  were increasing use of machinery and steam power in factories for manufacturing of goods that had previously been made by hand by people working at home. Although the industrial Revolution took place throughout the western world, Britain easily led the way because of her resources of the necessary coal and iron ore, the fact that   British   inventors  designed  many  of   the   new   machines themselves and growing empire (including USA) also gave Britain large overseas markets — in Nigeria’s case the available resources are sold for the foreign exchange they earn. Nigeria ingenious investors  are  discouraged  by  the  uncertainty  and  chaos  in  our political terrain; and Nigeria’s markets are flooded by imported luxury goods. An antithesis to the pre-requisites for an industrial revolution.

‘Nigeria  had  a  chance  between  1971  and  1981  when  the “energy crisis” of the’70s brought in a stream of income that made the country buoyant; another opportunity came for Nigeria to embark on a more fundamental approach to economic development during the 1991Iraq war with a stream of unexpected income inform of windfall profit from the supply of barrels of oil at a price well above the budgeted price.

“But in the  relevant time-frame, the  Nigeria input into  the science and  technology of  the  strategic oil resources was  made through the NNPC. Whatever may have been achieved failed to meet the prescription of the south commission (made up of the third world countries of Africa, Asia, south American and the Arab world), which advised that as development proceeds states should plan to shift the pattern of production and exports from raw materials to manufacture in such a way as to produce products with high and medium research development intensity, so as to counteract the adverse consequences of the decline in the prices of raw material in the commodity market.

“As it is well known it is the collapse of oil prices in the first-half of  1980’s  that  brought  about  the  various  austerity  measures  in Nigeria  and  eventually  led  to  the  1986  structural  adjustment programme (SAP) engineered by the international monetary agencies (IMA) (Animalu Op Cit P17).

In the forward to his book fundamentals of small business management, Eze (1999:iii) had corroborated, “there is no doubt that Nigeria as a nation, has, since attaining independence in 1960, tried to achieve meaningful economic   development. (But) most of the (relevant) policies, one must say, are centrally planned and government dominated

“The resultant impact of this excessive government domination of the economy left much to be desired leading to massive development in the 1970’s by the government. This is done under the economic policy of privatization and commercialization.

“This shift in emphasis thus created a challenge of building a capable dynamic and resourceful entrepreneurs to take the baton of economic revitalization from government. These entrepreneurs incidentally have to fulfill this onerous task through the establishment of business that could mainly be classified as small and median scale in nature. It is pertinent to add here that the aforementioned task is a difficult one for obvious reasons; for one, the dwindling state of the economy has made it difficult for people to save and thereby little capital accumulated for investment. Further, our private sector is long underdeveloped making experienced entrepreneurs and small business managers scarce.

To drive his point home, Eze (op cit:) had informed “—there is a growing consensus among policy makers, academic, industrialist and economic planners that the development of local entrepreneurs and encouragement of the establishment of small business is the only panacea to our economic problems. This conclusion came as a result of our three decades of positioning government as the sole provider of all that makes life worth living-employment, basic infrastructure, public utilities, goods and services etc – on which huge national resources were spent. But all these turned out to be waste pipes through which out national resources are being drained as it was discovered that what Nigerians have been receiving from such enormous government investment efforts are gross inefficiency, massive unemployment, dwindling foreign exchange earnings, epileptic supply of utilities etc.

The foregoing led to the adoption of Structural Adjustment Programme (SAP) and, subsequently, the deregulation exercise. Under this new policy and programme, emphasis was shifted from government direct control to encouragement of private sector participation and development of entrepreneurs who are expected to establish small businesses as a more effective substitute for providing needed catalysts for our economic engineering.

In  the  foregoing statement, certain  agreement is  revealed, which is to the effect that to heal Nigerian economy-which for long has  been  suffering  from  instability  and  consequently  unable  to provide for the basic economic and social needs of Nigerians there has to be deliberate and vigorous pursuit of private sector development which, in turn, mandates the vigorous pursuit of entrepreneurial development, and consequently, the encouragement of the establishment of small and medium scale industries (business) as the basic ingredient of economic growth.

In his introductory statement while discussing the situation of small business development in the United Kingdom, Dewhurst and Burns (1993:1-3) had remarked: In all the short history of modern business there is nothing so strange as this. On the one hand we have  the  traditional belief in  the  rightness and power of size  – economy of scale rule the business world. In the United Kingdom we say we must be big to stand up against the ruthless cost effective multinational  corporations  based  in  the  U.S.A,  Pacific  basin  and Japan. And indeed in the United Kingdom we have gone further along this road of concentration than any other country in the world. Yet this predilation for economic orthodoxy has not brought economic success.

An alternative view point argues that economic success is not the sole criterion by which we should judge all things. Perhaps people matter, perhaps a society should be concerned to some extent with the quality of life, job satisfaction and good human relationship – some evidence has been produced recently that people working in small business units in a civilized society are more committed than those working in large, amorphous corporations.

As a solution, Fritz Schumacher, in Dewhurst et al (op cit.) suggested that intermediate technology should be developed.

This is a technology that is simpler, very much cheaper to acquire and very much easier to maintain than the highly sophisticated technology of the modern West; and this suggestion presupposes that for comparatively rural, primitive societies, like the Nigerian constituent communities, intermediate technology (rather than  a forced sudden transformation to  highly sophisticated and intricate type of technology) development would provide the necessary fillip and serve the needed basis for small business establishment and operation.

Schumacher had concluded, … small business is beneficial, it is flexible, it can adapt to new situation more easily than large corporations, it is innovative, it readily makes a good contribution and with efficient control and management techniques the benefit it gives can be greater.

The word ‘small’ is not used (here) in tight restrictive sense with reference to the operation and growth of established enterprise. A successful small business can grow into a medium sized business whilst still retaining those desirable characteristics of personalized control and managerial flexibility.

Yet Dehurst et al (op cit) in a feat of dis-impression pointed out: but it is now realized that much of the resources allocated in the past in the United Kingdom for start-ups has been wasted. The vast majority of the start-ups in the 1980s began as one person enterprises and finished up that way … only a small number of such enterprises have generated jobs”.

The  information contained  in  the  analysis  presented above would serve to set a stage for enquiries into our own situation here in Nigeria where numerous successful efforts have been made resulting in the establishment of many small scale enterprises. It is also true that there are many businessmen out there striving hard to establish one form of small business or the other. But no sooner when success is achieved, then failure.

Consequently, our collective hope of establishing a vibrant economy, driven by small business units, spread all over Nigeria, usually dims when we take a look at the history of Nigerian Economy and the approaches to business operation, the attitude of Nigerian businessmen to productive business organization, the resource management, government policy implementation and the  present widespread distrust based on the fact of widespread corrupt- practices-the probability of failure of entrepreneurial efforts is then very high.

Also in an expression of dis-impression Ezeh (op cit, p7) had corroborated;  ‘Nigeria  is  a  country  greatly  endowed  with  many natural and human resources. The business environment apparently offers opportunities for  many entrepreneurial ventures. Ironically, despite these endowments her state of economic development leaves much to be desired.

‘Whereas  entrepreneurship  may  not  be  the  missing  factor alone, it is without doubt an important component in the process of economic development. In fact the  start-up and development of small business remains one of the major ingredients of continued growth in any national economy. Consequently, in the quest for Nigeria’s economic development the role of indigenous entrepreneurship is likely to be much more important in small business than in large undertaking that were generally  favoured in the past.

Perhaps it is the realization of these facts that prompted both the federal and state governments to have since been vigorously impressing (harping) on the establishment of small business. As a result there has been an appreciable rise in the start up of varieties of business ventures especially the owner manager concerns. Many such business ventures rose sharply and fell, others still struggling to keep their heads above water, while others have managed to make some headway.

Incidentally, one would affirm that the cause of failure of small businesses are many and varied. And as a matter of fact some business fail before they are started.

The  truth of  the  foregoing statement was  corroborated by William Macfarlane in Eze (op cit:53) when he remarked; the field of business probably offers more freedom and fewer restriction to the would-be-business owner than almost any other (sources of livelihood). Despite this freedom, many business are started each year on a shoestring with little more than money and ambition. (And) since freedom of opportunity does not guarantee success thousands of new businesses fail each year.

Looking at the problems of small business enterprises from the accounting and or managerial point of view. Sullivan and Nnaemeka in Amuchieazi (op cit) had observed; the indigenous component of the  industrial  sector  is  made  up,  in  the  main,  of  small  scale enterprises … In terms of number of business establishment small business probably accounts for over 80% of the total number of enterprises in the country. Despite this numerical strength it is doubtful whether the small enterprises added value is up to 30% of aggregate added value of all enterprises … The reason for this is obvious; poor and backward management in matters of planning, accounting, personnel, market research and technology. These problems persist as insoluble problems because of low credit ratings of small business among banks and other lenders.

Inherent in the statement above is the importance of such factors as accounting and managerial competence to the success of small business.

If, as Macfarlene observed, many business are started each year  with  little  more  than  capital  and  ambition  (to  make  quick financial  gains),  and,  as  Sullivan  et  al  had  concluded,  the  low productivity results from poor and backward management in matters of planning, accounting etc, then failure results from the absence of proper   planning   as   a   beginning   Faculty   step   in   business establishment and operation.

Availability of capital and ambition which is sustained by high appetite for quick profit (financial gain) hasten the initial decision and continually quicken and direct the application of resource and further actions. It is such that this motive for quick profit beclouds the judgment of most Nigerians who have the will to venture into small business enterprises.

By this also the necessary caution which results from careful planning and deliberate effort at discharging other managerial functions  of  organizing,  directing  and  coordinating,  control  and review is not usually applied. And by extension, the money, the material, the men and the machines (the 4ms) are not properly managed. So, even if the business exists there may be no growth or at best the growth would be stunted. It is a popular maxim within the business management circle that he who fails to plan, plans to fail.

Ultimately, the discharge of all management functions necessitate decision making. And it is a common knowledge within the business management profession that no decision taken in the process of discharging any of the management functions is cost free.

As a matter of fact, most business owners avoid the implementation of relevant business decisions because of the cost implication. But failure to implement relevant business decision as a way of conserving fund is not in any way a show of wisdom in business management practice. Prudence should be the guiding concept. Prudence in decision making, prudence in implementation and prudence in the application of resources of every kind.

The concept of prudence mitigates the excessive expansion of profit motive, prudence in business management prompts the business owner to continually plough back the profit (or part of the profit) to pay for the cost of management function decision implementation, to renew the machine, to retrain the workers (to motivate them), to repay loans, and or pay dividends, to seek for new markets for raw material and products sale, to employ and pay for highly skilled labour and to expand the business. On the other hand, the drive for quick profit mitigates the discharge of management functions as it intimately constitutes a clog on the wheel of management actions.

The figure below shows the demonstration of the negative effect of expanded profit motive   to   profit   objective   itself   and growth of the business.

Ordinarily when an  effective  management practice  is  being applied in the administration of a business organization, the wheel of management will be in normal rotation and so permits the proper discharge of all management functions including timely decision making and decision implementation. In the course of this rotatory motion, the synergy achieved among the various aspects of management actions mandates the management functions to make reasonable  contributions continuously  to  the  achievement of  the objective of entrepreneurial actions-value addition and profit making. Usually, the  desire for  profit is  at the  center of the  wheel and prompting the rotation. Then as the desire or motive for profit keeps expanding the rotatory motion keeps slowing down as a result of frictions generated  and ultimately, the system comes to a halt when

the expansion of profit motive gets to its peak. Below is the diagram that attempts to illustrate the foregoing analysis.

The management chain in rotatory motion with function contributing to net profit.

        Increased size of profit centre

        Reduced opportunity region slowing down.

At a very highly blown profit centre (depending excessively expanded profit motive), the opportunity region which serves as a buffer for the rotary motion is  completely  closed signaling the stoppage of operation and winding up of a business enterprise.

It should be understood that the peak of the expansion of profit motive is defined by the point in the operational life cycle of any business organization when as a result of the attitude of “the owner takes it all”, the investor or the entrepreneur (whether as individual or  group)  fail  the  expectations  of  other  stake  holders  –  the employees are not motivated again as salaries, allowance training and promotion are denied, as the business owner fails to employ skilled  workers,  as  the  management fail  to  repay  loans,  as  the management fail to  dedicate fund for  the  service or renewal of machines, as the credit worthiness becomes in doubt, as the organization fail to pay taxes and discharge other social responsibilities and as the business owner is distracted by some other selfish interests and the business organization is weighed down by negligence and lack of dedication because of what the owner may have considered as “financial self fulfillment or because of the philosoph high profit and saving drive,” out of share greed   and diversion of fund.

On the other hand, the negligence and distraction may result from outright lack of competence in management and therefore the inability to sustain the existence and growth of the business.

Generally, in order to perform well in the management of profit oriented business organization it is suggested that a business owner- manager/entrepreneur should  possess  some  good  knowledge  for analyzing and interpreting accounting information in order to enable him take a cost effective decision in every situation especially regarding the issue of profit management.

Accounting information would help the business manager against what Eze (op cit) called cumulative losses. According to him, a small business enterprise can fail ultimately if the manager continues to overlook or cause some little losses to himself, (the small business), especially in the hope that he is enjoying the benefit of an increasing profit margin.

In agreement with above statement, Macfarlane (op cit) stated, in several cases serious losses were traced to a series of seemingly insignificant little leaks. Collectively, these dribble amounted to the equivalent of a substantial breach in the financial dike.

To conclude in the words of Dewhurst and Burn (op cit pg 6), without good control of financial resources and without proper financial planning, including sustaining a reasonable measure of net profit achievement and application no business can prosper.

1.2:  STATEMENT OF THE PROBLEM

Born today but died yesterday; is a maxim that apply describe the fate of most small businesses that spring up in various places at various times year after year in Nigeria out of entrepreneurial efforts of Nigerians, individual and government, but on a shoestring with little more than money and ambition.

Failure of entrepreneurial efforts results partly from faulty start due  to  lack  of  patience  and  spending needed  to  articulate  and establish  a  good  business plan  before  going into  operation, but mainly as a result of poor knowledge of general and particularly financial  management. Quick  Profit  Motive  is  then  implicated  as major factor that erodes most entrepreneurs of what the researcher may call proper managerial sensibilities: the effect of it all is that the chick yet in the hatchery is being forced to start laying its own eggs and  in  the  process  the  chick  dies  or  fails  to  grow  or  at  best experience stunted growth. Generally, given this impatience revealed by lack of planning and desire for Quick Profit success of entrepreneurial efforts is hampered or postponed indefinitely.

Expressed in a broad business term this problem could be referred  to  as  ‘lack  of  good  Business  Management’,  but  the researcher has chosen to situate the problem from the accounting point of view as lack of financial prudence.

In researcher’s view expanded profit motive works against the application of prudence in business, but particularly, financial management. Financial prudence presupposes ability to save financial earnings by living an enabling life style-not spending profit before it is earned nor denying various stakeholders the benefit of the added value achieved by the business in the course of its operation-source

for needed fund at minimum cost, choose investment options that will yield maximally at minimal risk of looses.

Incidentally, most people who have the interest, will, and courage to venture into self employment exercise lack these financial management abilities and ultimately the effect is high rate of small business failure.

1.3:  RESEARCH HYPOTHESIS

The research revolves around the desire to determine the level of contribution of prudent profit (financial) management or lack of it (quick profit motive) to the success or failure of entrepreneurship. Entrepreneurship here is represented by the established small and medium scale enterprises. The required result will be determined on the basis of the outcome of the test of the following hypothesis.

1.4:  PURPOSE OF THE STUDY

This  research  effort  is  meant  to  investigate  the  level  of contribution of prudent profit (financial) management to the success of  small  businesses  and  establish  the  level  and  implication  of expanded profit motive to the failure of small business.

It will reveal the extent to which poor management of profit works against the success of small business.   To make this study more  meaningful  and  convincing the  researcher would  seek  the assistance of and source data from growing successful private business enterprise, Alo Aluminum Ltd, National Directorate of Employment  (NDE)  office  and  some  banks;  First  Bank  Plc  and Nigerian Agricultural Cooperative and Rural Development Bank Plc branch offices in Enugu on rate of repayment of loans granted for establishment and operation of small business. Degree and  causes of failure of such enterprises.

1.5:  SIGNIFICANCE OF THE STUDY

Here,  the  researcher  wish  to  start  by  emphasizing  the conclusion  drawn  by  William  Macfarlane  (op  cit)  concerning  the causes of  business failure.  He  had  stated,  the  field  of  business probably offers more freedom and fewer restrictions to the would-be business owner than almost any other field. Despite this freedom, many businesses are started each year on a shoe-string with little

more than money and ambition. Since freedom of opportunity does not guarantee success, thousands of new business fail each years”. The result of this study is meant to redirect the attitude of and guide the approaches to be adopted by the would-be entrepreneurs in an effort to establish and nurture one form of business enterprise or the other, paying great attention to the use of the instrumentality of prudent generation and application of profits. In the end, the study will establish the degree (1 or 0) of the benefit of knowledge of prudent financial (profit) management to the success of small business operations, as against the effects of Quick Profit Motive.

This  study  will  benefit  National  Directorate  of  employment (NDE) National Poverty Eradication Programme (NAPEP) First Bank Plc, NACRBA Plc and other financial institution, which grant loan facilities and subsidies to assist budding entrepreneurs and promote small and medium scale business establishment and operation and such other  facilitating institutions as  Nigeria Export Import Bank (NEXIM), as it will reveal the characteristics that make for successful entrepreneurship.

1.6:  SCOPE OF THE STUDY

The research results will be obtained from the collation and analysis of data from First Bank Plc, and Nigerian Agric Corporative and Rural Development Bank (NACRDB) Plc, Enugu main offices at Okpara Avenue   and Presidential Road Independence Layout respectively, as long standing financiers of and participants in small and medium scale industrial development programme; other sources of data would be the Nigeria Export Import Bank (NEXIM Bank) with Headquarters at Abuja, National Directorate of Employment (NDE) Enugu Office, and the information obtained from Alo Aluminum (Nigeria) Ltd Head Office on Enugu –Abakaliki Express Way, Emene Enugu, to give direction of profit management approaches that keep such  budding medium scale  business organization operating and growing.

1.7:  LIMITATION OF THE STUDY

1      (a)    The  researcher  has  limited  the  assessment  of Aluminum Ltd financial management approaches to the analysis of the nature of financing mix in use by the enterprise,

(b)    Rate of labour turnover, motivational instruments fund application  to maintenance and replacement of machines as determinants of profit deployment mode, and the adequacy of

(c)    Debt   instruments   in   use,   sources   and   degree   of adherence to repayment agreement (programme)

2.     Data collected from banks, NEXIM and NDE will be used only for the determination of the degree of default on loan repayment schedule, the cause of default and the place of poor attitude of profit making (management) in the failure of the management   of   borrowing   enterprises   to   keep   to   the repayment schedule.

3.     Knowledge of intended business venture will be revealed in the feasibility study submitted (if any). Hence the data from NDE will also reveal those who source loan based on naked ambition and desire for quick profit.

The researcher is constrained by time required for the completion of this study to narrow down the coverage of the study to selected institutions in Enugu Metropolis. Those institutions consulted spread across manufacturing, training, promotional and facilitating areas of entrepreneurship development programme. They include:

(i)   A medium scale Aluminum manufacturing company – the Aluminum Nig Ltd.

(ii)  The Nigerian Directorate of Employment (NDE)

(iii) The Nigerian Agricultural and Cooperative Bank (NACB)

(iv) The First Bank Plc Enugu Main Office, Okpara Avenue Enugu

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