INTRODUCTION
Organizations,
be they public or private are geared towards efficiency and effectiveness. If
not, they can be classed as not achieving the purpose for which they have been
created. To this end, there emerged various theories for organizational
efficiency over the course of several centuries.
These
could include the classical organization theory, scientific theory, neo-
classical theory, modern theory to mention but a few. A close examination of
the postulates of these theories suggest that all organizations, be they modern
or classical cannot do without elements of some basic assumptions of these
theories. Never the less, it is pertinent for this paper to capture that single
theory for which organizations in Nigeria can be effective and dynamic,
operating within a constantly changing and ever evolving environment. Nowadays,
it is increasingly being realized that organizations cannot simply remained
within the ambit of “economism” as they were understood in the past, in that
not all organizations are firstly, private; and secondly, even private
organizations are now being designed to align with service delivery even though
they are created for profit making. Consequently, the private organization
becomes highly complex just as public organizations are since their size
determines their complexity. Hence they are run and organized as though they
are public organizations with a varying motive of profit maximization. This
does not preclude the fact that service delivery does not guarantee profit- far
from it. The long term objective is to attain profit through delivery of the
best services achievable.
In
this regard, organizations such as Dangote group are established for the sole
purpose of profit making, yet they combine that with the need for service
delivery through their products and their corporate social responsibility.
However one may ask as to which theory best captures the creation of an
organization geared towards service delivery or profit making, which ought to
be modern and dynamic, one that responds to the needs of its target
beneficiaries as well as that which is capable of absorbing shocks from the
environment while it provides benefits to that same environment by neutralizing
these shocks and transforming same into benefits for society. Whether public or
private organizations, there exists the likelihood that if not well managed
would not be efficient, and may end up exploiting individuals or individuals
exploiting the organization or both (Shafritz et al, 2011).
Against
this background, creation of dynamic organizations in Nigeria entails the
creation of that organization- be it public or private that achieves its set
objectives at the optimal possible cost while providing the surrounding
environment with the necessary output that guarantees sustenance for both the
organization and the environment. To this end, this paper shall utilize the
modern structural organization theory to study how dynamic organizations can be
created using Dangote group of companies as a case study.
While
it is not our aim to give a comprehensive definition of organization, the
definition offered here best captures the context within which we define an
organization. Organization therefore, may be defined as a group of people
united by a common cause who, strives consciously for the achievement of that
cause, as translated into objective(s) of the group.
OBJECTIVE
OF THE STUDY
Considering
the environment of the Nigerian state as things stand at the moment,
organizations find it difficult to operate and provide the essential services
contained in their goals. The objective of this paper therefore, is to find
ways through which modern organizations can be created to handle the volatile
Nigerian situation through providing for effectiveness in achieving
organizational goals and neutralizing environmental instabilities. In essence,
the paper tries to find out ways in which organizations can achieve their aims
efficiently utilizing both human and material resources optimally.
REVIEW
OF RELATED LITERATURE
Indeed, many have written on the necessary
conditions for the continuous and consistent existence of organizations, not
just in Nigeria, but other parts of the world. The difference however remains
that in Nigeria, the environment is highly volatile and organizations find it
difficult to operate, let alone prosper. According to De Vita et al (2001), organizations,
especially non- profitable ones make management decisions in dynamic and
changing environments. At the hub of these fluid environmental systems are
three (3) key institutional players; business, governments, and non- profitable
organizations, and these relate to one another forming an exchange of ideas,
resources, and responsibilities. They are affected by shifting external forces
such as socio- demographic factors, economic conditions, political dynamics and
values and norms of the community. Olarewaju (2012) posited that external
business environment (political, economic, socio- cultural, technological etc)
has impact on organizational performance (effectiveness, efficiency, increased
sale, achievement of corporate goals etc), thus organizations ought to pay more
attention to doing periodic scanning. It further stated that controlling of the
external business environment can be done to some extent.
Adebisi
and Babatunde (2008) on the other hand
aver that organizations should strategically, periodically and continuously
involve in environmental scanning and pay strong attention to threats (so as to
avoid) and opportunities (so as to seize) in the environment. When
organizational management pays attention to environmental scanning, it leads to
positive organizational performance. Furthermore, external environment may have
positive impact on the organizational performance of over 30%, and as such, the
use of strategic environmental scanning in evaluating environmental forces
helps in seizing opportunities and avoiding threats. Management needs to take
into cognizance, the environmental dynamism and uncertainties in adopting
strategies. The Capital, Market, Consulting (CMC) submitted that for
organizations to be dynamic in their abilities to change and develop, they must
possess core stability, or risk failure. Leadership, production and operating
models are the organizational triad, each having their parts to play in
maintaining the stability of operation, and ensuring that there is not
organizational vacuum created during periods of change. Unity of purpose
between leadership and production can be maintained in even the most complex of
situations and how that will provide ongoing assurance to both sides. Aregbeyen
(2011) in addition, states that reengineering significantly improves
profitability performance of an organization, but not for growth and the extent
of its financial intermediation.
According
Osemeke (2010), to achieve the desired sustainable private organizational
sector led growth of the economy, it is imperative for government to
continuously put in place policies and programmes that will encourage private
sector participation and contribution to the development process of a state. To
him, the growth in the financial performance of the private sector
organizations and its sustained prospects and success hinged on all those
countries whose economy is robust, stable, export led and competitive. That,
organizations by their nature, process and transform resources (inputs) into
products and services (outputs). To measure organizational performance
therefore is to measure how effectively and efficiently the transformation
process takes place. Thomas (2014) on the other hand describes organizational
dynamism through efficient management. He stated that management is a planned
loom for the transition transitions of individuals, groups and organizations
from existing state to a future state. Thus, management change process is as
important as change itself. To this end, change managers should therefore
successfully manage the human side of change in order to avoid resistance to
change, using the appropriate change strategies, thus enhancing overall performance
of the organization. For change to succeed, the human aspect of change
management must be successfully addressed in order to avoid resistance to
change. This is because implementation of change often result in period of
organizational tension because it involves movement from the known to the
unknown and therefore, risky, stressful and complex. For Nissen and Leweling
(2008), the ensuing conceptual integration in a punctuated equilibrium context,
they illustrated and elucidated the importance of interrelationship between
static and dynamic organizations, with open organizations being in a constant
state of flux. Inputs are received and output produced. There is input and
output of both matter and energy, continual adaptation to environment and
usually, an increase in order and complexity, with differentiation of parts
over time.
In
Osisioma and Nzewi’s (2016) view, there is an existence of a significant
relationship sensing capability and performance of some selected commercial
banks operating in Awka, especially First bank Nigeria Plc and United Bank for
Africa Plc. They discovered that sensing capabilities influences a bank’s
performance positively and thus, any firm that fails to embrace them may not
survive in dynamic market environment because the possession of only unique
resources is not sufficient anymore to gain competitive advantage. To Nwuche et
al (2012), the ability of organizations to invest wisely on their human capital
does not necessarily position the organization to anticipate problems in
advance and develop satisfactory and timely solutions. In addition, investment
in human capital does not necessarily increase organizational ability to
integrate, build and reconfigure internal and external components to address
rapidly changing environments, and that human capital is most important element
of intellectual capital and organization that concentrate more on human and
material capital alike are most successful. For Hotepo et al (2010), limited
resources in the long run may affect organizational performance, but when
managed properly, the positive effects may be used to encourage organizational
innovativeness and cooperation among employees. Optimal utitlization of limited
resources guarantees organizational efficiency and effectiveness.
Osibanjo
et al (2014) believe that the culture of an organization is determined by a
number of factors geographical location, managerial board and organizational
policy, to mention but a few. Ibidunni et al (2014), aver that there is a need
for small organizations such as SMEs to carry out research on product
innovation in order to meet and fulfill the demands of all consumers and the
market. Chete and Adeoti (2010) submitted that manufacturing in Nigeria suffers
acute shortages of infrastructure such as good roads, potable water, and most
significantly, power. Consequently, most firms and organizations rely on self-
supply of electricity by using generators, which escalate cost of operation and
erode their competitiveness relative to other firms in the global market
environment. The council on European Commission (2008) attested to the fact
that external bodies to an organization such as political bodies with
background of elected members and employed people can pose a significant threat
to organizational goals once the aims of the organization is not in tandem with
those of these political bodies. Further, if organizations are not well
established, they could duplicate functions where there is no conflict of
interest between the organization and external bodies that exist in the sane
environment.
All
the literature reviewed so far clearly show that organizations have to consider
their operational environments in order to succeed in the accomplishment of
their goals. This is plausible, particularly when we consider the fact that
information about the environment is not always available, and the little
available ones are not often reliable. This paper shows that no matter the
volatility of the environment, organizations can adjust through their internal
structures to accommodate ever changing environmental uncertainties. For this
reason, the modern structural organization theory was utilized to examine how
Dangote group operates from within vis a vis environmental inconsistencies, and
how it is able to sustain organizational objectives amidst harsh and
challenging environment of, not just Nigeria but Africa.
THEORETICAL
FRAMEWORK
To
analyze the operations of Dangote group of companies and see how their
operations can help in the establishment of dynamic organizations in Nigeria,
the Modern Structural Organizational Theory was adopted as the frame of
analysis for this paper. This theory gained significant inroads in the second
half of the 20th century, and still holds its relevancy till date.
This theory owes its relevance through the works of Tom Burns, Peter N. Blau,
Richard W. Scott, Arthur H. Walker, Jay W. Lorsch, Henry Minsberg, Richard M.
Burton and Borge Obel.
This
theory presupposes that organizations are institutions whose primary purpose is
to accomplish objectives; and rational organizational behavior is accomplished
best through defined rules of formal authority. Organizational control and co
ordination are key for maintaining organizational rationality; there is a best
structure for every organization, or at least, a most appropriate structure in
light of its given objectives, the environmental conditions surrounding the
nature of its products and/ or services, and the technology of the production
process; equally, specialization and division of labour increase the quality
and quantity of production, particularly in light of skilled operations and
professions. The theory further stressed that most problems in organizations
result from structural flaws and can be resolved by changing the structure; it
is also concerned with vertical differentiations- hierarchical levels of
organizational authority and co ordination, and horizontal differentiation
between product or service lines, geographical areas or skills
Furthermore,
organizational charts are key tools for organizational efficiency, and modern
structuralists are concerned with many of the same issues as classical
structuralists- the tenets are similar: organizational efficiency,
organizational rationality, increased production of wealth in terms of real
goods and services. The major strengths for this theory is that it focuses on
goals and objectives; it expands the perspective of bureaucracy (both
mechanistic and organic); it acknowledges the existence of both formal and informal elements of
organizations; it stresses formal authority and responsibility; it expands the
understanding and specialization and division of labor; it is flexible in terms
of organizational structure options- that is, in terms of product and functions;
it acknowledges to some extent, the existence of external environments,
especially technology; it also synthesizes much of the elements of virtually
all organizational theories; in addition, it is a rational model, which is not
as closed as system or classical model; and more flexible compared to the
classical model of organizational management theories.
It
may have its own weaknesses, which may include that, it does not address the
potential of external influences on the organization, but this is beside the
point since the theory allows for organizations to develop formal structures
that respond to their environment as appropriately as they deem fit, then the
weakness cannot be a hindrance in this regard since all theories, considered in
the face of empirical data are not said to be 100% perfect.
Dangote
group, just like any other modern organization is complex, and complex
organizations are at times, not so flexible as stated by the modern structural
organizational theory. In this regard, Dangote group appears unique, in that it
structures its organization to fit the environment of operation and adjust to
changing circumstances when the need arises.
METHODOLOGY
Considering
the nature of this paper, secondary data analysis was adopted for the sourcing,
presentation and the analysis of data since all data have been generated
through text books, academic journals, corporate profile of the company in the
case study, internet materials and online reports of international governmental
and non- governmental organizations. Furthermore, due to time frame allowed for
the study, we did not have time to generate primary data, hence the choice of
secondary data generation and qualitative analysis. The study carefully studied
the mission, vision and objective of Dangote group of companies and tries to
see whether that can serve toward the establishment of dynamic organizations
that can be responsive to environmental changes while still keeping in focus
the corporate objective of the organization, whether public or private.
DANGOTE
GROUP MISSION AND OBJECTIVES
The
mission of Dangote group is to touch the lives of people by providing the basic
needs, while the vision of the company is to be a world class enterprise that
is passionate about enhancing the standard of living of the general populace
and giving high returns to stakeholders. Among the corporate values which can
be termed the organizational culture are: customer service- as a world class
organization, they understand that they exist to serve and satisfy their customers.
Accordingly, their customer orientation reflects intimacy, integrity and
learning; entrepreneurship – they continuously seek and develop new business,
employing state of the art method to maintain their market leadership;
leadership- they thrive on being leaders in their business, market and
communities. To drive this, they focus on continuous improvement, partnership
and professionalism; excellence- they are a large organization, working
together to deliver the best products and services to their valuable customers
and stakeholders. To achieve this, they demonstrate team work, respect and
meritocracy (Dangote group corporate profile, retrieved 8th August,
2016).
Dangote
is one of Nigeria’s diversified business conglomerates with its corporate
headquarters located in Nigeria’s commercial city of Lagos, in West Africa. The
company produces among other goods and services, sugar which it manufactures,
refines, package and distribute; salt, which it also refines, packages and
distributes; flour and semolina, which is also milled, packaged and
distributed; cement which is imported/ manufactured and distributed; pasta,
noodle and tomato paste which are manufactured and also distributed; vegetable
oil is also refined, packaged and distributed. In addition, the company carries
out logistic services such as port management and haulage, and it equally
carries out its corporate social responsibility by offering philanthropic
activities in Nigeria and other places it operates. In view of its successes in
areas already ventured into, the company is considering venturing into other
areas of business such as petroleum refining and distribution, steel and
fertilizer production, telecommunications and real estate. This is due to the
fact that since its inception, the group has experienced phenomenal growth
amidst the unstable political and economic environment in Nigeria.
One
basic question that necessarily draws the attention of interesting members of
the public is that; how did the organization achieve so much success in the
face of unstable political and business environment in Nigeria? The
organizations structural and managerial composition may be one of such reasons
the company is able to stare the trouble economic, business and political
waters in Nigeria. Explaining this within the modern structural theory suggest
that the company employs experts and specialists from various fields whenever
it is venturing into such fields for business purposes considering the fact
that Dangote group started off as a sugar importation, packaging and
distribution company. Over the years, it diversified its operations to include
those products and services already mention through studying of the operational
environment and engaging the services of the right caliber of managerial staff
for its operations. Further, the group has adopted a working policy towards
expansion, provision of maximum returns to stake holders and at the same time,
providing basic consumer goods and services- something people would always
demand. The managerial team comprises the President and Chief Executive Officer
(CEO), the Vice President as the next in line of hierarchy and authority, this
position is followed by the Chief Operations Officer (COO), the group Executive
Director, logistics and Distribution is the next in line followed by Group
Managing Director, cement, who has under his supervision, CEO cement Nigeria,
Ghana and other countries where cement operations exist. In addition there is
the existence of two special advisers to the President/ CEO; the two Executive
Directors oversee the operations and finance and under these are the Group
Chief Communications Officer, the Group Chief Finance Officer and Group Head,
Corporate Communications. This is better illustrated by the Groups Managerial
chart below:
President/
CEO
Vice
President
Chief
Operating Officer
Group
Executive Director, logistics and Operations Group
Executive Directors
Special
Advisers to President
CEO
cement (Ghana) CEO cement (Nigeria) CEO cement (Kenya)
Group
Chief Human Resource Officer Group
Chief Communications Officer Group
Chief Finance Officer
Figure
1.1: Managerial/ Organizational
chart of Dangote Group
The
managerial positions are all occupied by professionals with experiences in
their various fields of operation, in addition to the fact that the company
designed its managerial hierarchy to suit the kind and nature of operations the
company undertakes. In the chart, there are two advisers to the president and
CEO, two Executive Directors whose positions may reflect only once in the
table. This managerial design only suits the diverse nature of Dangote
corporate production since it does not produce a single product and renders a
single service but diverse ones. This organizational chart suits the nature of
Dangote business operations.
ANALYSIS
Organizations,
whether corporate or non corporate are to design their organizations in such a
way that they suit their manner of operation. In addition, organizations are
supposed to stick to their objectives and work as a team towards achieving that
objective, where the design clearly states the role every personnel should play
towards achieving same. Dangote group is a private organization geared towards
profit maximization, but regardless of the purpose and objective of the
organization, all organizations are supposed to have clearly defined hierarchy
and job description for all members of the organization to ensure that no one
intrudes into the duties of other members of the organization. Organizations
are supposed to employ professionals and experts who specialize on the
operations of the organization and not on the basis of patronage and client
relations.
This
is in the belief that these professionals have been trained on how to manage
organization even amidst unstable situations, where they could make the
organizations responsive to environmental changes no matter the circumstances.
This is at the heart of successes recorded by Dangote as an organization, which
may not be replicated by other organizations in Nigeria, especially public
organizations, which are created for service delivery as against private
organizations drive for private gains. Furthermore, organizations are supposed
to constantly monitor their environment to anticipate difficulties and project
or proffer solutions to challenges that may be emerging from the environment.
Organizations are also supposed to organize constant training and refresher
courses for their employees to bring them up to date with modern practices in
their fields so as to ensure best global practices when carrying out
operations, which is the reason why Dangote group advances due to the fact that
the group has offices in London and other cities around the globe to ensure
that reports are cross referenced to enhance productivity. It may not be
possible for all organizations to have that kind of outreach, but they can
sponsor personnel to local, national and global workshops to keep in tune with
best global practices. Organizations in Nigeria, considering the Nigerian
situation, have to provide for most of their infrastructural needs. To this
end, they provide for extra cost in production and distribution since roads and
communication are also inadequate to say the least. Experts and specialists see
to it that all of these overheads are offset in order to bring about
realization of organizational objectives in the midst of these environmental
instabilities. Therefore, if organizations are to respond to environmental
changes, these are the designs in terms of hierarchy and placements that
organizations adopt in order to be successful in creating organization that are
modern and dynamic.
CONCLUSION
The
paper studied the various methods through which dynamic organizations can be
created in Nigeria. Theoretically speaking, modern structural organizations are
the best suited scientific processes for the practical application when
organizations are to be modern, dynamic and change with changing circumstances
of environmental conditions. The theory provides that organizational designs
have to be carried out in a manner they can withstand environmental changes and
conditions. In essence, there is flexibility in organizational structure.
Secondly, organizations are supposed to be hierarchical with a clear line of
authority for every personnel to be able to delineate between his duties and
those of his superiors coupled with those of his subordinates. In this regard,
job titles speak much volume of the role an individual personnel plays in the
organization.
In
the study of Dangote group of companies, it was discovered that the
hierarchical design of the company is unique in that it created positions for
only professionals that are necessary for organizational efficiency without
creating positions to provide for gratification of family, relatives and
associates. By the nature of its operations, Dangote group is a multi- service
and product organization which have as its objectives, multiple tasks to
achieve. What other organizations can learn from this fact is that flexibility
in organizational design is sin-qua non for the ability of the organization to
achieve its goals amidst changing environmental conditions. Unity of purpose is
another aspect through which organizations can successfully adapt to
environmental challenges. In addition to this, organizations are supposed to be
forward looking in order to anticipate future trends in their line of operation
so as to plan for unforeseen circumstances before they occur. This way, they
would not be overwhelmed by events when they occur within their environment of
operation, most especially unstable ones such as Nigeria.
Adeoti,
J. O. (2013), Industrial growth in Nigeria: Lessons and Challenges. Ibadan
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