EFFECT OF ENVIRONMENTAL FACTORS ON THE BUSINESS PERFORMANCE OF IMPERIAL BAKERY

EFFECT OF ENVIRONMENTAL FACTORS ON THE BUSINESS PERFORMANCE OF IMPERIAL BAKERY

CHAPTER ONE

INTRODUCTION

1. Background to the Study

Business organization cannot operate successfully in isolation without dependence on supportive institutions, variables and factors (Oginni, 2010). This means that business organisation exists and operates within an environment where there is complex interplay in terms of activities as well as networks of relationship between and among human resources, material resources and other systems. In the views of Aborade (2005) all business decisions are found to be contingent upon a good analysis of the environment which is often the bane of all the constraints as this environment creates the opportunities, threats and problems for the business organisation. Evolving from this is the belief that business organization is an integral part of its environment on the ground that they are mutually interdependent and exclusive where the environment plays the role of providing the resources and opportunities to organization for its existence, and the business organization in turn, offers its goods and services to the people living in the environment for survival and enlightenment (Ajala, 2005).

The environment in which business organizations operate is a complex, multi-focus dynamic and has a far reaching effect on such organization. The environment tends, shape the outlook, and goal of the organization by placing constraints on them. These constraints in the environment of organizations goal could be in the form of competition, this sets a limit on the goals specify by the organization. For instance, trade union asking for increase in salary, will affect the shareholder dividend. Unethical behaviour also affects profit. All these settings provide multiple contexts that influence how the organization operates and how and what it produces (Oghojafor, 1998).

According to Pearce and Robinson (2003) business environments can be grouped into three interrelated categories: the operating environments, the industrial environments and the remote environments. Operating environments, also called the competitive or task environments, are those factors in a competitive situation that affect the success of a company in acquiring the needed resources and/or in marketing its products and services profitably. According to Pearce and Robinson (2003), some of these factors include: the competitive position of the company, the reputation of the company in the eyes of suppliers/sellers and creditors. Kotler and Armstrong (2013) identified the remote environments as the main macro-environments that include natural and technological environments, social environments, economic and cultural environments, and political, law and security environments.

The concept of business performance can only be understood if the variables that constitute environmental factors are well recognized. These variables include customers, competitors, suppliers, distributors, substitutes, government, the economic, demographic, social and cultural factors. Others are innovations and technological steadfastness (Nnamani & Ajagu, 2014). These factors could be internal to the organization or external. Therefore, examining the environment of business is essential for the survival, growth and performance of any business especially the Small and Medium Scale Enterprises (SMEs). It is against this background that this study was conducted to determine the effects of environmental factors on the business performance of imperial bakery, Abuja.

1. Statement of the Problem

The Nigerian business environment has witnessed a lot changes from the period of the oil boom in the 1960s and the early 1970s. Austerity measures in the early 1980s and the structured adjustment programme in the late 1980s from the company act of 1960s allied matter decree in the 1990s, undoubtedly brought in the eighty’s the opportunities to be exploited by some firms or the problems that inhibit the survival of so many business firm. The need for studying business environment became important considering the fact that business organization do not operate in vacuum and effective management in complex and dynamic society such as Nigeria, requires the assessment of strengths and weaknesses of the organization and the opportunities and threats posed and the challenges of the external environment. Other issues such as retarded growth rate, high rate of unemployment, low industrial output, coupled with poor demand in terms of services and tangible products, energy crisis put alots of pressure on the survival of business organization. The relationship between industrial representatives and government institutions and representatives keep nose-diving virtually on all matters, criminal activities increasing at alarming and uncontrollable rate, exercising excessive control through excess of rules and regulations with stringent conditions, tax policies without adequate provision of infrastructural facilities to ameliorate business operations. In the face of all these challenges, how effectively can a business organisation respond to its basic operational functions of survival, growth and profit maximisation, hence the need to examine the effect of environmental factors on the business performance of Imperal bakery Abuja.

1. Objectives of the Study

The general objective of this study is to examine the effect of environmental factors on the business performance of Imperial Bakery, Abuja. The specific objectives of the study include:

1. To examine the effect of social cultural factors on the performance of  Imperial Bakery Abuja.
2. To examine the effect of technological factors on the performance of Imperial Bakery Abuja.
3. To assess the effect of political factors on the performance of Imperial Bakery Abuja.
   1. Research questions
4. How does the social cultural factors affect performance of Imperial Bakery Abuja?
5. To what extent does technological factors affect the performance of Imperial Bakery Abuja?
6. How does political factors affect the performance of Imperial Bakery Abuja?

1. Statement of hypothesis

H₀₁: There are no significant effect of cultural factors on the performance of Imperial Bakery.

H₀₂: There is no significant effect of technological factors on the performance of Imperial Bakery Abuja.

H₀₃: Political factors does not have any significant effect on the performance of Imperial Bakery Abuja.

1. Scope and Limitations of the Study

The scope this study will be limited to the examination of the effect of environmental factors on the business performance with particular reference to Imperial Bakery Abuja.

The limitations faced by the researcher in the course of this study include the following:

1. Finance: Lack of adequate funds tends to diminish the vital information that is supposed to obtain, which will thoroughly enhance the findings of this research work.
2. Data: The shortage of comprehensive information is another constraint faced during the research, since most of the employees and customers of the establishment especially the owner and management staff of imperial bakery were very reluctant to share relevant information with the researcher.
3. Time Factor: Insufficient time to undertake the research was also identified as the constraint of the research work and the task of combining lectures and writing of assignments and presentations of term papers in the lecture hall was very cumbersome. Since most of the time, have to forfeit some lectures in other to meet up with my research work.

1. Significance of the study

The research work provided insight into the dynamism of business environment through which major and minor constraints in the environment were identified, the role of environmental factors in ensuring as well as heralding survival and growth of business organisations in relation to danger posed by these environmental factors were identified. The work has equally placed environmental factors in the fore front of business survival and growth thus enlightening that the success of any business organisation is contingent on understanding the environmental factors.

The findings of this study contribute to the knowledge on the effect of environmental factors on the business performance in Nigeria. The study adds value to the existing literature and establishes the gaps for future research on the same or similar topic by suggesting areas that need further studies to be conducted. This helps policy maker to come out with possible alternative policy intervention on creating conducive business environment to improve the performance of micro, small and medium enterprises in Nigeria.

1. Historical Background of the Case Study

Imperial Bakery was established in August 1999 with its head office in Cape town street Wuse zone 4 Abuja. Since its inception, Imperial Bakeries has since grown to become a synonym for fresh quality bread in the capital city. Made with passion and utmost care, Imperial loaves are rich in nutrients that leave one satisfied and smiling.

The management of Imperial Bakery believes that customer satisfaction begins with total employee commitment; its workforce made up of a team of young, dedicated professionals supported by well-trained and skilled personnel. Imperial Bakeries have taken the time in the past two decades to perfect their recipes and ensure that they produce nothing but the best in honour of what is perhaps the earliest processed food known to man and arguably the most consumed food in Nigeria and around the world.

Imperial Bakeries has since been certified by the Standards Organization of Nigeria (SON) and the National Agency for Food and Drug Administration and Control (NAFDAC). They were among the first bakery in Nigeria to received SON’s seal of approval and have move on to win the hearts of many Nigerians with our delicious products.

PRODUCTS

Imperial Bakery products are baked using specially selected ingredients to give one delicious and affordable product every time. Their skilled bakers pay attention to every detail when crafting each of the products like fine art. The following are the products of Imperial Bakery:

1.  Family Loaf: They are highly nutritious and crafted to not only appeal to ones senses but also because of its size will leave one and the entire family delightfully satisfied. This loaf is ideal for sandwiches and toasts.
2. Imperial Classic Loaf: It is fluffy, yummy, light, and has a free-rising shape to it. One look at this classic loaf makes one want to take a big bite.
3. Imperial Mini Loaf: This is a smaller size of family loaf. This  mini loaf for solo consumers and budget customers.
4. Cinnamon Roll: This bread is made with raisins and enhanced with rich cinnamon extract that is baked to perfection and glazed with caramel. Its large segmented size ensures that everybody gets a piece.
5. Imperial Fruit Bread: The fruit bread is similar to the cinnamon roll except that it is filled with more raisins to give it an extra unique fruity taste.
6. Imperial Wheat Bread: It is 100% made with whole wheat and without any white flour. This is to ensure that one get exactly what one is asking for; which is a healthy yet tasty alternative.
7. Imperial Cake: This English type of cake is delicately flavoured so that it is not too sweet and not too plain either. Its rich delicious taste makes for a perfect family snack.
8. Imperial Cup Cakes: This small but yummy product is the perfect desert.
9. Imperial Burger Buns, Large & Mini: The burger buns are ideal for making sandwiches and burgers of all sorts. Alternatively, they could be served as bread roll appetizers, and could be served with tea or soups.
10. Chin-chin: This is a product we are especially proud of because it has its roots in West Africa. It’s so good it was named twice. The Chin-Chins are made with the finest ingredients, which are mixed, flattened and deep-fried to perfection. Because of its bite-size feature, it is ideal for any occasion from parties and luncheons to weddings and picnics.
11. French stick (Baguette): The baguettes are also ideal for making sandwiches. Hard on the outside, soft on the inside and adequately salted to perfection.
12. Meat pie: The size and taste of the meat pies makes it a perfect snack for all occasions. Stuffed with carrots, potatoes, onions, lots of beef, our meat pies are tasty and highly nutritious.
13. Doughnut: Our doughnuts are deep-fried using cholesterol free vegetable oil whilst maintaining its rich taste. This item is perfect for birthdays, picnics, luncheons, and weddings. Our doughnuts come in different varieties so you have options.

1. Definition of Key Terms

Business environment: Business environment is the sum total of all external and internal factors that influence a business. These are force that affect the operation of business organization (Nnamani & Ajagu, 2014)

Business Performance: Business performance is defined as the operational ability to satisfy the desires of the company’s major shareholders” (Smith & Reece, 1999), and it must be assessed to measure an organisations’ accomplishment.

Customers: A customer is an individual or business that purchases the goods or services produced by a business (Investopedia, 2019). These are the people or organization in the environment who buy goods and services from the organization. 

Economic Environment: The economic environment of an organization is a set of economic indicator which influences the cost of all input and the ability of customer to buy goods and services (Nnamani & Ajagu, 2014).

External forces: These are forces that are not controlled by the business organization. It refers to those forces that are outside the control of the company. They are externally inclined and therefore the management has no control over them (Oginni, 2010).

Internal forces: these are the forces that are controlled by the business organization. It refers to those forces that are within the reach of the company. These forces are internally inclined because they take place within the company and the management has control over them (Oginni, 2010).