EFFECT OF PLANNING TOOLS ON THE EFFECTIVENESS OF NOVUM AGRICULTURAL INDUSTRY LIMITED KARU, NASARAWA STATE

EFFECT OF PLANNING TOOLS ON THE EFFECTIVENESS OF NOVUM AGRICULTURAL INDUSTRY LIMITED KARU, NASARAWA STATE

ABSTRACT

This study examine the effect of planning tools on the effectiveness of Novum Agricultural Industry Limited. Specifically the seek to identify the types of planning tools adopted by Novum Agricultural Industry Limited, examine the effect of budgeting on organizational effectiveness in the organization, assess the effects of SWOT Analysis on organizational effectiveness, determine the effect of financial analysis on the effectiveness of Novum Agricultural Industry Limited and examine the effect of value chain analysis on the effectiveness of Novum Agricultural Industry Limited. Survey research design was adopted and frequency and tabular percentage forms were used for data presentation while chi-square and regression analysis was used to test the hypothesis. The findings of the study shows that Novum Agricultural Industry limited adopted planning tools such as Budgeting / Financial analysis, SWOT analysis and Value chain analysis, budgeting, SWOT Analysis, financial analysis and value chain analysis has significant effect on the effectiveness of Novum Agricultural Industry Limited. Finally, the study recommends that Novum Agricultural Industry limited should identify the planning tools that are most effective for the organization and strictly adhere to it to enhance the effectiveness of the organization and that organizations should endeavor to adopt appropriate training planning tools and it relevance because appropriate training provides a solid foundation for employees’ performance.

CHAPTER ONE

INTRODUCTION

1.       Background of the Study

Effective planning is a backbone support to strategic management and it is a major process in the conduct of management. According to Wagner (2016) the importance of effective planning can be explained from four points of view including environmental scanning, strategy formulation, and linking goals to budgets and strategic planning as a process. The planning process begins with setting organizational goals. The linkage between effective planning and organizational performance needs analysis to get a better understanding on how strategic planning is applied in practice and to improve performance.

For planning to be effective and useful, there must be commitment and involvement across all levels of the organization, overcome inherent problems such as; rivalry among departments, projects, resistance to change, resource requirement, resources allocation and so on. The strategy initiatives and directions set up by firm’s management in the form of mission and vision statements and targets for cost saving, debt/equity ratios embodied as argued by Grant (2017) “a framework of constraints and objectives that bounded and directed strategic choices.”

Effective planning in an organizational therefore is made possible through the use of planning tools (Nelson, 2018). Managers use planning tools and techniques to help their organization be more efficient and effective. There are three module of planning tools; these tools are assessing the environment, allocating resources and contemporary planning (Steiner, 2010). Planning tools obtains its basis from the concept that the future of an organization can be potentially influenced by actions undertaken in the present. The process involved the definition of the ideal future state of the organization, the formulation of a roadmap outlining how to achieve it and moving from the current state towards the organization’s future. Steiner (2010) observes planning tools as comprising of the setting of organizational goals, developing policies and strategies towards achieving these goals and the establishment of an in depth plan aimed at detailing the implementation process.

Key components of the planning tools include the mission, vision, goals and objectives of the organization (Nelson, 2018). The mission is a statement defining the organizational purpose for existence, the business the organization is involved in, and how it executes its mandate to achieve its vision.  An organization’s vision on the other hand is futuristic in nature and concentrates on the long term view of the firm. Goals and objectives form the milestones within which short term as well as long term operations framework can be measured (Nelson, 2018).

Organizational performance interrogates the actual output achieved by an organization in comparison with the intended output. According to Richard (2018), profitability, customer satisfaction, product performance and market share are key indicators of organizational performance, achieving efficiency and effectiveness as measured through prudent utilization of organizational resources is another measure of organizational performance as it drives cost differentiation and customer satisfaction.

Effectiveness and efficiency in an organization is to engage in detailed planning in order to identify the sources of raw materials, equipment employed, determines sources of delivery dates, sources of working capital etc. Many organization projects failed due to inadequate use of planning tools, thus a good planning must therefore be realistic, have clearly defined objectives, comprehensive, flexible and economically effective. Thus it is against this background that this study seeks to examine the effect of planning tools on organizational effectiveness in Novum Agricultural Industry Limited Karu, Nasarawa State

1.       Statement of the Problem

In most of our organization today, productivity of workers is far below expectations, many business organization incur a lot of losses from wastage caused by lack of effective planning which results to inefficiency of workers and low productivity. In view of the many challenges that business organizations are exposed to, it is imperative for them, both profit and nonprofit organizations, to anticipate challenges, identify their strengths to meet anticipated challenges and take control of available opportunities to obtain maximum productivity through the use of planning tools. Unfortunately, in most organizations, planning tools such as network analysis, cost benefits analysis, SWOT analysis, benchmarking, Perter’s five forces, competitive analysis, budgeting etc are not effectively used and implemented properly. Many organizations do not attach any importance to planning tools and strategic planning therefore; do not have strategic plans for their organizations. This could be borne out of lack of appreciation and knowledge of the relevance of using appropriate planning tools to enhance organizational effectiveness. Despite the fact that the use of planning tools has brought far reaching revolution which has tremendously transformed most business landscape, it is still plagued with some constraints in so many organizations. Some of these constraints include wrong application of planning tools, unethical attitude, poor organizational structure and Non conformity of the rules and standards by the workers of the company towards actualization of the strategic goals. In an attempt to address this unfortunate development, there is the need to critically examine the effect of planning tools on organizational effectiveness in Novum Agricultural industry Limited.

1.       Objectives of the Study

The general objective of the study is to examine the effect of planning tools on organizational effectiveness in Novum Agricultural Industry Limited. The specific objectives of the study include:

1. To examine the effect of budgeting on organizational effectiveness in Novum Agricultural Industry Limited.
2. To assess the effects of SWOT Analysis on organizational effectiveness in Novum Agricultural Industry Limited.
3. To determine the effect of financial analysis on the effectiveness of Novum Agricultural Industry Limited.
4. To examine the effect of value chain analysis on the effectiveness of Novum Agricultural Industry Limited.
   1.       Research Questions
5. What are the effects of budgeting on organizational effectiveness in Novum Agricultural Industry Limited?
6. What is the effects of SWOT Analysis on organizational effectiveness in Novum Agricultural Industry Limited?
7. What is the effect of financial analysis on the effectiveness of Novum Agricultural Industry Limited?
8. What is the effect of value chain analysis on the effectiveness of Novum Agricultural Industry Limited?

1.5       Research Hypothesis

The researcher formulated the hypothesis to find out the relationship between planning tools and organizational effectiveness in Novum Agricultural Industry Limited. These hypotheses are thus stated below:

H₀₁: Budgeting has no significant effect on organizational effectiveness in Novum Agricultural Industry Limited.

H₁₁: Budgeting has significant effect on organizational effectiveness in Novum Agricultural Industry Limited.

H₀₂: SWOT Analysis has no significant effect on organizational effectiveness in Novum Agricultural Industry Limited.

H₁₂: SWOT Analysis has significant effect on organizational effectiveness in Novum Agricultural Industry Limited.

H₀₃: Financial analysis has no significant effect on the effectiveness of Novum Agricultural Industry Limited.

H₁₃: Financial analysis has significant effect on the effectiveness of Novum Agricultural Industry Limited.

H₀₄: Value chain analysis has no significant effect on the effectiveness of Novum Agricultural Industry Limited.

H₁₄: Value chain analysis has significant effect on the effectiveness of Novum Agricultural Industry Limited.

1.6       Scope and Limitations of the Study

The scope of the study is limited the effect of planning on organizational effectiveness in NOVUM Agricultural Industries Ltd. Specifically the scope of the study will limited to the following planning tools: environmental scanning, budgeting, organization’s mission, vision, goals and objectives

Limitations of the Study

The authenticity as well as validity in a research work of this magnitude and nature is limited by number of factors both economic, materially, socially, physically and otherwise.

The authenticity of findings surely depends largely on the degree of honesty exhibited by the officials concerned, some vital in information was not revealed because of their competitors, having no insight on information as the running and operations of their company.

Secondly, this project work required one to consult some books by way of exploring the library in preparing its review and compilation, but the piece of work is therefore restricted to a number of books available. Moreover, the investigation on this research work only covered the company.

1.7       Significance of the Study

The findings of the study will be of great assistance to the management organizations especially Novum Agricultural Industry Limited to address various planning issues and planning tools that affect their performance. To understand and appreciate the critical aspects concerning strategic planning and impact on overall firm’s performance, as well as seek ways to support and facilitate planning tools  and work towards eradicating bottlenecks to achieve effective implementation of strategic decisions. 

Stakeholders

The study will also provide stakeholders in the real sector of the economy especially the agricultural sector with a basis of understanding planning tools in the industry or organization and seek ways of adopting best management practices hence contributing positively to the overall sector planning.

Scholars

The study provided information to current and potential scholars on the area of planning tools and organizational effectiveness in both private and public sector. Likewise, researchers may want to gain insights and explore the area of planning tool in the agricultural industry.

1.8       Historical Background of Novum Agricultural Industries

 NOVUM Agricultural Industries was founded in 2006 as a large scale commercial agriculture and agric-processing company. In 2010, a supreme feed was born with the installation of large scale commercial feeds mill in Nasarawa state. With the mission to produce and supply the highest quality animal feed in Nigeria. NOVUM Agricultural industries installed a factory for processing soya beans and groundnut providing fully inclusive operations to ensure that NOVUM Agricultural Industries (NAI) performs its vital role of converting grains and oil seeds to the highest quality animal feed available through partnerships with world leading animal feed Additive supplier, it is committed to excellence and on-going innovation and control over the inputs used in the feed production process.

However, the industry started with functional departments, with general manager as the Head of General Administration who is responsible for overseeing all milling operations of the company, including the poultry feed factory, the fish feed factory, the oil mill and maize meal factory.

But as time goes on, it is expanded both in size and the productions, and specialized in much foundation by creating separate sub departments, like administrative department, finance department and operation department.

The administrative department deals with the recruitment, decision making and welfare of the workers etc.

The finance department deals with all type of monetary transaction of the company. The operation department includes the design and management of products, services and processes, the operation department evaluates and allocates resources to effectively deliver of products and services.

Before any work can commence in NOVUM Agricultural industry, the laid down planning must be followed, that is the production policy must be known and the process of manufacturing machines requirements, factory layout, storage and handling systems, skill required in men and their method of training and re- training can be determined. This policy is largely well determined by nature of being carried out.

1.9       Definition of Terms

The meanings attached to some terms as used in the context of this study are given below:

1. Planning: – It involves selecting enterprise goals and department objectives, then finding ways of achieving them.
2. Effectiveness: – This means the ability to producing a desired result.
3. Efficiency: – This means the ability to produce something without wasting materials, time and energy.
4. Organization: – This simple means a system where two or more people agreed to get together and coordinate their activities to meet goals.
5. Human Resources Planning: – Putting right number of people and right kind of people at the right place, at the right time, and doing the right thing for which they are suited for the achievement of the goals of the organization.