GLOBALIZATION AND HUMAN RESOURCE MANGEEMNT IN BREWERING INDUSTRIES: PROBLEMS AND PROSPECTS (A STUDY OF NB PLC AND GUNNESS PLC)

ABSTRACT

The world as a unit where several of its parts have to have close contact and interaction  with  one  another  and  to  recognize themselves as  sharing a common humanity, took a new turn in the fifteen century earth the Portuguese, Spanish and Dutch voyages of discovery, a phenomenon advances in maritime technology. It is the result of that process or phenomenon that has come, generally to be referred to as globalization. Globalization reflects man’s common  humanity, a desire to explore and break barriers and to conquer both territory and forces and to constrain them.

This research project seeks to determine the problems and prospects of globalization on human resource management, and this was a study of selected Breweries- NB Plc and Guinness Plc, Lagos.

A  sample  of  136  respondents all randomly selected  from  the  staff and management of NB Plc, Lagos. Both primarily and secondary data were used.

At the end of the research study, it was gathered that globalization has made impact on human resource management; and the aspects it has made such impact includes: the economic, political, social/cultural, and technological aspects; and the countries that stands to greatly benefit or better  put,  that  has  immensely  benefited  from  globalization  has  both negative and positive dimensions. From the foregoing it can be concluded that globalization is a dual-purpose sword, which implies that it has come to stay  and  must  be  properly  and  adequately addressed.  In  addressing  it therefore, it should be ensured that its fruits extends to all countries of the world; the fears that the growth that globalization brings is inherently destabilizing  should  be  wiped  out;  the  concern  within  richer  countries should be addressed that international competition does not hurt living standard; and the problems complicated by rapid business expansion, notably  environmental  degradation,  disease,  migration,  crime, unemployment and terrorism should be tackled.

CHAPTER ONE

1.1  INTRODUCTION OF THE STUDY

The role of human resources management in an organization’s strategic management planning is extremely important in helping firms find ways to complete effectively in the domestic and foreign markets. Service, product quality and productivity   are   the   most   critical   competitive   issues concerning most organization vesper (2002:92). Quality and productivity constitute the core of managing work organizations, people and operations because they are critical to costs, sales, competitiveness and profitability Williams (1999:201).

To  improve  quality  and  productivity  in  organizations most executives now prefer human resource methods such as employee motivation programs, employee training and education,  and  changing  the  organization’s culture,  rather than technology-oriented solutions. The strategic importance of effective human resource management is becoming more recognized. Improvements in the firm’s competitive position can work only if human resource management is elevated and remains  a   crucial  area   in   the   strategic  planning  and implementation of plans.

Wider economic, technology, political and social forces shape human resource management policies and activities. What happens in the global economy influences human resource management in the domestic economy. There is general agreement among academics and senior business executives that the structure as well as the fundamental dynamics of global business have dramatically changed in the pass three decades. These changes have impacted much on human resource management Sisson, (2003:90).

The key question that immediately arises is what has changed in the global economy and in political and social environments that impacts on human resource management? Analyzing the external contexts of human important, because in various ways the conditions external organization present particular opportunities and constraints in the management of human resources Legge, (2000:70).

In the 1960s, changing public polices covering productivity  and  employment  law  extended  the  personnel

management function. Personnel management practices arose as the result of changes in the political economy. In the 1980s, the context of human resource management was profoundly influenced by the global political environment Fasuyi, (2000:47). In the 1990s the processes if globalization have important consequence for “high value” businesses and strategic human resource management.

Globalization describes recent changes in the world economy and reflects trade flows, declining transportation costs, the portability of  new and more integrated financial markets.  Increasingly, multinational companies can  readily shift or transfer production to wherever the mix of raw materials, infrastructure, skilled workers, labour cost and regulatory requirement offer the greatest potential to compete in the international market. This movement impacts on the traditional HRM practices in the new country to which they move.

Against this background, this study is set to examine (problems and prospects) on human resource management in Nigeria Breweries.

1.2   Statement of the problem

All scientific and most social science research are necessitated by perceived problem. As such, the desire and quest to research on the topic:

Globalization  and  human  resource  management  in

Nigeria breweries: problems and prospects”.

Globalization touches people indifferent was, for better or for worse, and means different things to different people, evokes different emotions and invokes different reactions from different people. Aimouwu, (2003-2004). Need this be so? Why is it so? According to Aimiuwu, (2003-2004) much too often, managers (both political and corporate) seem to forget that markets, organizations, societies, are made up, not of psychographics, but real people.

Is globalization a trend for markets to become worldwide in scope? Or is globalization a process of increasing interconnectedness of individuals, groups, companies and countries? This may depend on ones definition. What is clear, however, is  that,  whilst  globalization’s momentum may  be

overwhelmingly economic, the impact is also over- archnigly social, political and cultural.

If as some claim, globalization is good and it is inevitable, why is here so much vehement opposition? An understanding of the arguments on both sides will help to appreciate the HRM  is  involved.  The  proponents  argue  that  by  lowering barrier and shortening logistics chairs, globalization

Promotes real choices and the freedom to trade, to choose markets, to access required/ appropriate technology for production, to realize economic potential thereby empowering the consumer, and ushering in long –term prosperity for all, some ideal of  a ‘universal civilization’. Globalization has been projected by some as ‘a key ideal by which we understand the transition of human society into the third world millennium”. Globalization, according to the economists would deliver the envisaged rapid development for the third world and that it is the world’s poor who will benefit most.

On the contrary, the opponents are even more vehement, sometimes   violent.   “globalization   is   the   offensive   and oppressive march of international capitalism”, destroy all the

cherished  values  in  its  wake,  everywhere.  It  represents cultural subjugation, and ideology conquest, economic integration, with all the gains of economic of scale, places’ profit over people’ for debt relief, decry the monstrosity of IMF, world bank, WTO, and of course multinationals. In rich countries, protesters accuse globalization of consumer harassment, environmental degradation, promoting unemployment (through agreements like NAFTA), bleeding workers, destabilizing the welfare state, undermining government, etc. who voted for WTO? Read many placards. Regarding poor countries, globalization is accused of entrenching poverty, and ruthlessly grinding the poor everywhere, not only widening the gap between the rich and the poor between countries and within countries.

Fairly, or unfairly, several failures are blamed on globalization. It is perhaps less unfair to regard these as unfulfilled expectations, where so much (magic) is expected of globalization. This may have informed the worries and questions by  Dr.  Nelson  Mandela  at  the    world  economic forum, Davos, February, 1999: “is globalization only to benefit

the powerful and the financiers, speculators, investors and traders? Does it offer nothing to men, women and children, ravaged by the violence of poverty?”

1.3  OBJECTIVES OF THE STUDY

i.      To determine the problems and prospects as it concerns globalization and human resources management in Nigeria breweries.

ii.     To ascertain if globalization has more positive impact of human resource than negative impact vice versa.

iii.    To find out if there is a relationship between globalization and human resource management;

iv.    To examine the suspects of globalization that impacts on human resource management;

v.     To determine if there is any part of the world that stands to gain or that have been gaining from globalization.

1.4  RESEARCH QUESTIONS

The following are the research questions raised for this research work;

a. Does globalization make any impact on human resource management?

b.     If it does, is the impact positive or negative?

c.     What are the positive and negative impact it make on human resource management?

d.     Is there relationship between globalization and human resources management?

e.     What aspects of globalization really impacts on the human resource management?

f.      Is there any part of the world that really has gained is really gaining from the impact of globalization than the others? If there is, what part of the world?

1.5  SIGNIFICANCE OF THIS STUDY

The significance of this study derives from its usefulness in the following ways:

1.    Human Resource Manager

The study will be very useful to human resources mangers. This is because it will provide useful information on how change in  the economy can  influence HRM practices. This will enable them formulate human resource management policies of international standard for the organization.

2.    Management

Management will also through this study see the need for continuing industrial harmony occasioned by good employer – employee relationship in the face of structural and business changes occasioned by global business integration. This will enable if formulate human resources management policies in line with these changes.

3.    Government

The government will similarly benefit from the study. It will  understand  how  political  changes affect  business  and HRM. The study will recommend how effective HRM policy can be formulated and implemented in the context of globalization, which affects workers welfare.

4.    Trade Unions

Trade unionists will also benefit from this study as they will understand how global changes affect business and HRM. This will enable them to adopt more desirable approaches in the relationship with management.

5.    Students

Students who will carry out related studies in the future will find this work useful. It will serve as reference as material

to them. Besides, the research findings can provide the basis for further studies.

1.6  SCOPE OF THE STUDY

The study focuses on globalization and human resources management: problems and prospects. Special emphasis laid on the positive and negative effects of globalization on human resource management.

1.7  LIMITATION OF THE STUDY

The major limitation for this study is uncooperative attitude of many of the senior officials of the breweries into this study. A good number of them refused to answer the questions put forward to them: orally some also refused to complete the questionnaires. This adversely affected the information available for the study.

Secondly, the study could have been extended to more states but the researcher could not afford the cost involved because of financial constraint.

Finally, the study could not be finished on a record time because of time constraint occasioned by pressures of other academic work.

BACKGROUND OF THE STUDY AREAS

1.8  PROFILE OF NIGERIAN BREWERIES PLC

It  is  pertinent in  a  study to this nature that a  brief background/profile of  the  organization/company where  the research will be conducted, be introduced to the reader, as such an exercise will assist him and other immensely in knowing the study area.

Nigeria breweries Plc, the pioneer and biggest and largest brewing company in Nigeria, was incorporated in 1946 and recorded a landmark when the first bottle of STAR Larger beer rolled off the bottling lines in its Lagos brewery in June 1949. this was followed by Aba brewery, which was commissioned in

1975, Kaduna brewery in 1963 and Ibadan brewery in 1982. in September 1993, the company acquired its fifth brewery in Enugu. Thus, from it humble beginning in 1946, the company now has five breweries form which high quality products are distributed to all parts of this great country.

COMPANY EQUITY

With about 55,000 shareholders, the authorized share capital of Nigeria breweries Plc is N457m. sixty-five percent

(65%) of  the share is  held  by  Nigerians amongst who are company employees of various categories. The company’s turnover increased from N10.768 billion in 1995 to N12.256 billion in 1996, while a sum of N4.6 billion was paid to the federal and state governments in various forms of taxes as against N4.0 billion in the previous year.

In 1996, the company paid a dividend of N1.00 kobo per share, amounting to N915 million. This level of dividends is better appreciated if it is recalled that the company gave a script issue of one for one in 1995, thus increasing the equity base of the company from 457.5 million ordinary shares to915 million ordinary shares. The import of these developments has been a corresponding growth in the prosperity of company’s shareholders whose funds have appreciated in value far in excess of their original investments.

BRAND PORTFOLIO

Nigeria breweries Plc has a portfolio of six high quality brands; star larger beer (1969); Gulder Larger Beer (1970); Maltina (1976), Legend extra stout (1992); Armstel Maltal (1994) and the Schweppes range of carbonated soft drinks

(Schweppes bitter  lemon,  Schweppes tonic  and  Schweppes soda water) launched in December 1995. Together, the brands have  facilitated our  strong leadership position in  the  total brewed products market in Nigeria. Their outstanding quality and consumer franchise complement other company values and capabilities to set Nigerian Breweries Plc apart as the house of quality.

EXPORT

Nigerian  breweries  has  an  increasing export  business that dates back to 1986. Currently, we export to the U.K, U.S.A., Italy, Netherland, Germany and Kenya.

RESEARCH AND DEVELOPMENT

Nigerian  breweries  has  an  increasing export  business that dates back to 1986. Currently, we export to the U.K. U.S.A., Italy, Netherlands, Germany and Kenya.

Nigerian breweries Plc has kept pace with key international and operational procedures are always in conformity with proven best practices in most parts of the world.  It  is  in  line  with  this  policy  that  the  company

established a research activities on all aspects of the brewing operation.

ANCILLARY INDUSTRIES

As a major brewing concern, the company encourages the establishment of ancillary business. Many of these organizations and individuals depends largely on the company for their means of livelihood. These include manufactures of Bottles, Crown Corks, labels, cartons, Plastic Crates and such services as Hotels/clubs and direct Customers.

Social responsibility

Nigerian breweries Plc is a socially responsible corporate citizen with an enviable record of rendering corporate philanthropy in the areas of education, sports and health, among others. The company recently established and Education trust fund of N100 million to take active part in the funding of educational and research facilities in higher institutions, all in an effort to provide and encourage academic excellence in Nigeria. This is in addition to its secondary and university scholarships’ programme for children of its employees.

Nigeria breweries Plc is the foremost sponsor of sports by variety in the country with sponsorship covering table tennis, Cycling, chess, golf, badminton, dart, boat race and Ayo. The aim   is   to   develop   Nigerian   sportsmen   and   women   to participate in national and international sports. In the health sector, the company is committing funds to the building of the sickle cell centre in Nigeria, among other health related and charity activities.

CONCLUSION

Nigerian breweries plc is a model of success in the private sector. The company’s high profile, profitability and successful operations can be traced to good product quality; efficient management of operations and strategic penetration into the market environment. Others are proper understanding of consumer attitudes and habits and  high social responsibility profile at national and zonal levels.

1.9   PROFILE OF GUINNESS PLC

Arthur Guinness founded Guinness Company in 1759 at the St. James gate brewery in Dublin, Ireland. By 1859, Guinness stout was already well known around the world and

in 1870s; the St. James brewery has become the largest in the world. Today, Guinness stout available in over 150 countries.

Since 1800, Guinness has been exported to other countries but it was really imported shipping facilities of the mid    nineteenth  century  that  provided  the  foundation  of regular export trade.

In the late 1940s and 1950s, Nigerian became the Guinness best overseas market. During these years, the united Africa company limited  (UAC)  with  its  established  wholesale and retail network was the leading distributor of Guinness stout and this helped to increase trade further.

This market situation encouraged Arthur Guinness son and company to contemplate local production in Nigeria at a time UAC, the main distributor was changing its role from that of a general merchant to the one of increasing participation in the industry.

Both companies had much to contribute. Arthur Guinness and son company limited with its long brewing tradition  and  pioneer  in  technological advance and  united

African company limited with extensive knowledge of Nigeria and expertise in setting up industries.

Arthur   Guinness   and   Son   Company   limited   in association   with   united   African   company   formed   the marketing company, registered as Guinness Nigerian limited. Within a year, a decision was taken to build in Nigeria a brewery and a bottling plant to produce Guinness stout- a decision that involved capital investment of over N4 million.

The site was chosen in Ikeja, thus marked the birth of Ikeja brewery whose construction plan was started in September 1961.

The laying of the foundations stone for the brewery on 31

January 1962 was a historic occasion. The foundation stone was laid by the then lord Elvedon, later the third Earl of Iveagh, head of the Guinness family and the sixth chairman of Arthur Guinness son and company limited.

The then federal minister of finance, chief Festus Okotie Eboh assisted by Oba Akran, the then minister of western Nigeria  performed  the  ceremonial  recite  of  the  foundation stone laying. The Ikeja brewery built in a record time of sixteen

months, is the first Guinness brewery outside Ireland and the

UK. The opening ceremony was performed on 6th  of March

1963 by Dr. Nnamdi Azikwe, the then president federal republic of  Nigeria with  Lord Boyd, lord Moyne and  other members of the family and board of Arthur Guinness son and company limited. The commissioning of the Ikeja brewery therefore remains a major milestone in the industry of Guinness stout  since  December  1962  went  through  major expansions in the 1970s, 1980s with two additional breweries in Benin in 1974 and Ogba in 1982 respectively.

New brands such as Gordon’s spark, harp, Malta Guinness and Satzentbrau have been launched to complement the Guinness brand. The company had provided direct employment to about 1,400 Nigerians in various facets of the operations from brewing and bottling, finance, engineering to sales. It has also generated employment for thousands of other Nigerians engaged in the production of bottles, crown corks, creates, cartons, labels and many other goods and services it purchases.

COMPANY VISION

GOAL– to be the foremost marketer and producer of branded beer and malt drinks in Nigeria.

THE IMPERATIVES – grow Guinness (their core brand)

–      build profitable and distinctive brand

–      implore cost and capital effectiveness

–      inspire exceptional performance from everyone

VALUES– Freedom to succeed

–      passion about consumers

–      proud of what they do

–      be the best

GUINNESS IN THE COMMUNITY

In   the   discharge   of   its   corporate   responsibilities, Guinness Nigerian over the years has consistently focused on major support for the provision of good health care, water for rural communities, and support for sporting activities education and philanthropy. Under health, the company maintains eye hospital in Lagos, Kaduna and Onitsha. The company also supports blood bank programmes nation wide through   the   donation   of   hospital   Guinness   to   various hospitals. Similarly, national sporting activities are sponsored

by the brands. The annual Malta Guinness national handball competition is the most important and most popular handball tournament in Nigeria.

Table  tennis  is  sponsored  by  their  flagship  brand, Guinness stout, while harp and satzenbrau sponsor golf and polo competitions. In northern Nigeria, Malta Guinness also sponsors the prestigious annual Kaduna polo tournaments. CONTRIBUTION TO THE ECONOMY

Apart  from  the  provisions  of  direct  employment  to  many Nigerians; the company also engages many others through such services as supplies, distribution and transportation et cetera. As a good corporate citizen, Guinness Nigeria plc pays corporate tax, VAT, import/custom duty and withholding tax on dividends worth billions of naira annually to government. ACCOLADES

The company’s various  activities  and  unique  products have attracted deserves commendation and accolades from government, business associations, agencies and groups among others.

–       Guinness won the prestigious Nigerian stock exchange president merit award.

–      The  standard  organization  of  Nigeria  (SON)  Gold

Quality Award for all product categories since 1982.

–       The manufactures association award as one of the best kept industrial premises over the years.

–       Fire prevention association award as one of the best kept prevention association of Nigeria award for safely policies.

–       Fire prevention association of Nigeria award for safely policies.

–       Best improved quality award, Guinness Africa league for quality excellence 1988.

–      Guinness has been awarded ISO 9001:2000 certificate.

1.10 DEFINITION OF TERMS

1.     Globalization:     according     to     the     economist, globalization may be seen as a “process of increasing international division of labour and the accompanying integration of national economics through trade, goods

and services, cross-border corporate investments, and financial flows” (Horst Kohler, May 15, 2003).

2.     Human Resource: This could mean all the knowledge, skills, education and the capacities of all the people in a society.

3.     Management:  this  is  process  of  doing  something through people and with people. Better still, it could mean a process by which organizational inputs (materials,   human   and   financial   resources)   are brought  together  for  a  conversion  into  an  out  an output (final or finished goods and services).

4.     Strategic Management Planning: This is a concept that states the extremely important factors needed to help firms find ways to compete effectively in the domestic and foreign markets.

5.     Quality: this means standard and goods and services or something that are or is of substance.

6.     Productivity:  This  has  to  do  with  production  for manufacturing of goods and services.

7.    Organisation:  This means a word wide economy.

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