REENGINEERING NIGERIA PUBLIC SECTOR ORGANIZATIONS FOR EFFICIENCY

ABSTRACT

The research focuses on Reengineering Nigeria Public Sector Organizations for efficiency. The objectives of  this study are; to investigate the reasons for failure of  public sector organizations in Nigeria; to evaluate how to reengineer Nigeria public sector organizations especially the PHCN and NNPC; to identify the impact of reengineering in Nigerian public sector organizations; to evaluate the problems that can be encountered in reengineering public  sector  organization  in  Nigeria.  Primary  and  Secondary  data  were  used.  The population of the study is 1800, from which the sample size of 327 was determined using Taro Yamane’s formula. The research instruments used were questionnaire and interview. Chi-square was used to test the hypotheses. The findings from the study reveal that; maladministration,  government  interference,  corruption  are  the  reasons  for  failure  of Nigeria public sector organizations; adequate funding, training and developing employees’ privatization and commercialization could reengineer Nigeria public sector organizations; reengineering Nigeria public sector organizations could lead to provision of quality goods and services; financial constraints, corruption, bureaucratic bottleneck are challenges of reengineering public sector organizations. The study recommends that government should endeavour   to   motivate   staff   adequately   to   enhance   efficiency   and   productivity; infrastructural facilities should be improved as a matter of urgency for sustainability of public organizations; Nigerian public sector organizations should be privatized or commercialized to avoid imminent collapse; transparency, good moral and ethical standards should be introduced as a rule in Nigerian public sector organizations..

CHAPTER ONE INTRODUCTION

1.1      BACKGROUND OF THE STUDY

Most Nigerian Public Sector Organizations have disappointed a vast majority of Nigerians. These organizations, especially those that provide power and energy have provided very poor services in the country. The operating costs and debts of these organizations have risen dramatically that they have sparked a nationwide call for restructure or re-engineering.

Most public sector organizations have large number of employees, the Power Holding Company of Nigerian (PHCN) currently has 50,000 workers, while the Nigerian National Petroleum Corporation (NNPC) workforce is slightly lower, whose jobs would be threatened, and should these organizations fail. There is therefore the need to find a lasting solution to the aliments or failures of these public sector organizations as to forestall an unemployment crisis, a debt crisis, and ever increasing operating costs. This solution may lie in reengineering these organizations. (www.phcnonline.com)

Reengineering known as business process reengineering (BPR) is “the fundamental rethinking and radical redesign of business process to achieve dramatic improvements in critical,  contemporary measures of performance,  such as  cost,  quality,  services  and speed”. (Hammer and Champy 1993:32).

As conceived, it  means tossing aside old system starting over by going back to the beginning and inventing a better way of doing work. Its proponents emphasize the words, fundamental, radical, dramatic, and process.   The message here is simple and straight forward, businesses must  struggle to  discard  habits and  traditions, those  scarce and cherished walls of large, corporate entities that have transformed them into centralized bureaucracies, creating layers and layers of management over time, and which in turn symbolize the production of layers and layers of corporate rules, procedures and manuals.

What had resulted in less flexibility and adaptability and therefore less capacity for competition against small, lean and aggressive niche competitors engaged in predatory market offensive (Hammer and Champy 1993:3).

In some ways, reengineering appears to be a reincarnation of Taylor’s scientific management model, which aspired to employ scientific and empirical methods in understanding work at the shop room level. (Taylor, 1911) Taylor’s use of time and motion studies advanced the principles of understanding the work process to eliminate stages that cause wastage and fatigue among workers in the shop room.  Reengineering would  do  the  same  thing  except  that  it  advocates the  more  radical prescription of discarding old process and starting a new.  (www.phcnonline.com).

Consequently, it is not difficult to understand why reengineering has captured the imagination      of      practitioners      and      business      owners,      it      offers      an opportunity to make policy makers take another fresh look at the logic and rationale of these  rules  and  regulations,  opening  possibilities  of  discarding  old  ways  of  doing business.  This is significant because through the years, much attention has been given to the agenda of reforming the public sector organizations and appraises their poor performance  to  make  them  viable  to  provide  services  that  they  were  statutorily established to provide for Nigerians. (Danilo R. Reyes: 2000).

1.2      STATEMENT OF THE PROBLEM

It is a known fact, that many public sector organizations especially the Power Holding Company of Nigeria (PHCN) and the Nigerian National Petroleum Corporation (NNPC) have failed to deliver the services for which they were established.

In 1981, Nigeria, like many other oil producing countries experienced a major economic recession due to the fall in the production and price of crude oil, which is the major source  of  government  revenue.  It  was  revealed  that  most  of  the  public  sector organizations were infested with critical problems amongst which were defective capital structures resulting in heavy reliance on government for finance, corruption, misuse of monopoly powers, age falsification to remain in service beyond stipulated period, certificate         forgery         to         gain         entry         and         get         promotions,

ghost  workers  syndrome,  among  other  ills  were  the  problems  of  the  public  sector organizations.

In fact, after a decade of reforms in Nigeria public sector, it is still not time to jubilate because facilities and services are still poorly developed and delivered.  Thus, the study focuses on reengineering Nigeria public sector organization for efficiency.

1.3      OBJECTIVES OF THE STUDY

The specific objectives of this research are,

1)        To investigate the reasons for failure of public sector organizations in Nigeria.

2)        To evaluate how to reengineer Nigeria public sector organizations especially the

PHCN and NNPC

3)        To identify the impact of reengineering on Nigerian public sector organizations.

4)         To evaluate the problems that can be encountered in reengineering public sector organizations in Nigeria.

1.4      RESEARCH QUESTIONS

The following research questions were formulated for the study

(1)       What are the reasons for failure of public sector organizations in Nigeria? (2)       How would Nigeria public sector organizations be reengineered?

(3)       What is the impact of reengineering on the Nigerian public sector organizations? (4)       What are the problems encountered in reengineering public sector organizations

in Nigeria?

1.5    RESEARCH HYPOTHESES

To  guide  this  study  in  achieving  its  objectives,  the  following  null  and  alternate hypotheses were formulated.

(1)       H0:      Maladministration,  government   interference  and   corruption  are   not reasons for failure of public sector organization.

H1:      Maladministration, government interference and corruption are reasons for failure of public sector organization.

(2)       H0:      Adequate funding, training and developing employees, privatization and commercialization  could  not  reengineer  Nigeria  public  sector organizations.

H2:      Adequate funding, training and developing employees, privatization and commercialization could reengineer Nigeria public sector organizations.

(3)      H0:      Reengineering    Nigerian    public    sector    organizations    could    not

	H3:	lead to provision of quality goods and services.   Reengineering   Nigerian   public   sector   organizations   could	lead   to
		provision of quality goods and services.
(4)	H0:	financial   constraints,   corruption,   bureaucratic   bottleneck challenges of reengineering public sector organizations.	are   not
	H4:	Financial   constraints,   corruption,   bureaucratic   bottleneck   challenges of reengineering public sector organizations.	are   the

1.6      SIGNIFICANCE OF THE STUDY

This work is useful to the government as it provides information that will guide government in her policies and programmes for public sector organizations.

It will also serve as a good source of material for further studies.

1.7      SCOPE

The study covers the concept of reengineering, principles of reengineering, Elements of Reengineering, strategies and steps to a successful public sector reengineering. The study was carried out in Power Holding Company of Nigeria (PHCN) Okpara Avenue, and Nigerian National Petroleum Corporation (NNPC), Emene Depot, within Enugu Metropolis.

1.8      LIMITATION OF THE STUDY

The study has the following constraints

Financial Constraints: Finance was a major setback in carrying out this research.

Time: There were constraints of time in going to places where data and information relevant to the study could be obtained.

Attitude of the Respondents: Some of the respondents were unwilling to cooperate with the researcher because they felt that they would not benefit from the research and have the mindset that the secret of the organizations will be exposed.

1.9      DEFINITION OF TERMS (a)      Reengineering

Reengineering is a strategic management concept that advocates radical changes in the

way organizations are run in order to achieve order-of-magnitude improvements.

(b)       Total Quality Management (TQM)

This is also  a management concept that  seeks to achieve improved performance by carrying out small changes that bring about marginal or monumental improvement.

(c)       Decentralization

Is a management principle that kicks against the concentration of authority at the top management level. It advocates the delegation of authority to the lower levels of management.

(d)       Business Process Reengineering

Is the  fundamental rethinking and radical redesign of business processes to  achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality service and speed.

1.10    PROFILE OF THE SELECTED ORGANIZATIONS UNDER STUDY

1.10.1 The Nigerian National Petroleum Corporation (NNPC)

This  was  established  in  April  1,  1977  as  a  merger  of  the  Nigeria  National  Oil Corporation and the Federal Ministry of Mines and Steel. NNPC by law manages the joint venture between the Nigeria federal government and a number of foreign multinational corporations, which include, Royal Dutch Shell, Agip, Exxonmobile, Chevron and Texaco.

Through collaboration with these companies, the Nigerian government conducts petrol demand development. NNPC has sole responsibility for upstream and downstream developments, and it is also charged with regulating and supervising the oil industry on behalf of the Nigerian government. In 1988, the corporation was commercialized into twelve  (12)  strategic  business  units,  covering  the  entire  spectrum  of  oil  industry operations which include; exploration, and production, gas development, refining, distributions, petrochemicals engineering and commercial investments.   NNPC entered the last decade of the century as a young company still trying to carve out an identity for itself, independent of political control and still learning how to master the technological and commercial complexities of the oil industries. It did have a more developed diversification strategy than even before in its history, however, and for the moment a government willing to dilute its holdings in the industry as the price for supporting the corporation’s growth.   NNPC with civil unrest, political instability,  border disputes, corruption at the highest level and poor governance. Even so, international oil companies looked at Nigeria as a lucrative investments opportunity related to upstream oil exploration. Although NNPC management has been promising changes over the past years, company efforts had been slow at best and many Nigerians looked at NNPC with disdain.

New reforms however were on the horizon for the new millennium. After sixteen years (16) of military rule, Nigeria held democratic elections in 1999; Olusegun Obasanjo was elected as president and immediately set out to re-organize the country’s oil and gas sector.

As part of the restructure, strong emphasis was placed on natural gas development, at a time  when the  country’s  gas  was  been  flared  a  very wasteful and  environmentally unfriendly process.  As such a mandate was set forth that called for the termination of gas flaring, a focus on environmental cleanup and a realization of economic gains from natural gas in both the import and export market, so that gas revenue equaled oil revenue by 2010.  Although NNPC looked to be on the positive path for the future it continued to face issues of civil unrest and corruption, but there were no doubts that NNPC would remain a fixture in Nigeria’s oil and gas sector.

1.10.2    Historical Background of Power Holding Company of Nigeria (PHCN)

In 1950, the Federal Government passed the electricity corporation of Nigeria ordinance No.15 which gave birth to the Electricity Corporation of Nigeria (ECN), which became the statutory body responsible for generation transmission, distribution and sale of Electricity in Nigeria.

In 1962, the Federal Government established the Niger Dam Authority (NDA) by an act of parliament with the mandate to construct and maintain dams and other works on the River Niger and elsewhere to generate electricity by means of water power and improve navigation.

In June 1972, NEPA became operational with the responsibility to generate, transmit and distribute electricity to all part of the federation. (www.telling.com).

Having identified inadequate electricity supply as one of the critical problems of Nigeria since the dawn of the millennium, the Federal Government enacted the Electric Power Sector Reform (EPSR) Act on 11th March, 2003 with a view to making the private sector the  leading  engine of growth and reintegrate Nigeria into  the global economy as  a platform to attract foreign direct investment in an open and transparent manner. The reform culminated in the repeal of the National Electric Power Authority, (NEPA) and

the electricity act  into what is today known as Power Holding Company of Nigeria (PHCN). And it’s restructuring for vertical integration structure into 18 unbundled company, six generation and eleven distribution companies respectively.

The Nigeria public sector organization especially those that provide energy and power constituted an appropriate context for the study of reengineering prospects.   This is because they are strongly influenced by both economic and institutional forces.

In  Nigeria,  the  relatively  recent  entrance  of commercialization and  privatization of government public sector organizations has caused them to become much more conscious of their economic positions.  But has it led them to orientate towards efficiency in the production and  provision of their  services to  Nigerians. This questions  is  not  mere rhetoric as to say the least, the current situation of Nigerian energy sector is anything but satisfactory. The entire sector of the economy is barely coping, just as economic activities are gradually grinding to a halt.

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