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Tuesday 25 August 2015

THE IMPACT OF UNETHICAL BUSINESS PRACTICES ON THE NIGERIA MANUFACTURING SECTOR ( (A CASE STUDY OF WOOD WORK FURNITURE, ABUJA)






CHAPTER ONE:
INTRODUCTION

1.1     BACKGROUND OF THE STUDY
The conduct of business is with respect to Nigerian organizations shrouded in numerous unethical practices. Several cases evidencing this assertion are found in many organizations like banks, manufacturing companies, service oriented organizations, etc. Several cases of bank failures experienced in Nigeria in early 2000s were caused by unethical practices exhibited by employees, management and other stakeholders. Equally, companies like Nigercem, Niger Steel, AVOP, Oghe cashew industry, Ikenga Hotels, Presidential Hotel Enugu, etc, all
failed because of unethical practices in private sector organizations in Nigeria, unethical practices are exhibited by the operators. For instance, some dubious traders in Ogbette market Enugu cheat their customers by using faulty scales in measuring rice, beans and other consumable food items. With respect to banks, there were cases where some bank employees collaborate with some of the directors to embezzle customers’ money entrusted in their care.

In government ministries and parastatals, there are cases of misconduct in employee selection, motivation, training, promotion, and transfer, and even in the administration of other fringe benefits. In fact, case of unethical practices in both private and public sector organization in Nigeria are too numerous to mention.
Based on these ugly incidents, this study is set to investigate the main reason people indulge in unethical practices in the conduct of their businesses so as to ascertain the effect on corporate profitability and on the image of the organization.

Surprisingly, ethics is not taken seriously in Nigerian business terrain despite the critical importance of ethical practices for sustainable growth and development. The average Nigerian business sees business and ethics as oxymoron. A study on ethics in Nigeria business has clearly indicated that 98% of Nigerian businessmen agreed that they have engaged in one form of unethical practices or the other (Asolo, 2001). Other research study indicates that Nigerian businesses are rated worse in ethical practices (Oguechi, 1998, Asolo, 2008). It also indicates that unethical practices in Nigerian business terrain are multifarious and multidimensional. It includes short-changing of consumers by businesses, product-adulteration, over-pricing, shareholders manipulation, tax evasions, bribery, product misinformation, sales of expired goods etc. (Asolo, 2000). The perception of an average international investor is that an average Nigerian business man is not trustworthy. (Fafowora. O. 1998).
It is not surprising therefore that Nigerian business do not have sustainability potential. Businesses in Nigeria are founded on wrong principles that are devoid of strong ethical anchor. Strong ethical anchor can assist Nigeria businesses to grow and blossom into unforeseeable future (Ekanola A.B.2005). Most Nigerian businesses are guided by narrow selfish interest. They often do not consider ethical implications of their intra and inter  transactional behavior on critical stakeholders’ that include consumers, society and the environment.
Unethical business practices in Nigerian business terrain have therefore become a major disincentive to the growth and sustainable development of existing and potential businesses. Apart from the fact that absence of core ethical principles exposes Nigerian existing businesses to growth retardation, honest potential investors who might want to invest in Nigerian businesses are easily discouraged (Purmis A. 1994, Asolo A.A.A. 2006). Nigeria currently has high rate of dead businesses. Most businesses die because they basically abandoned ethical
principles from the onset. The challenge is now much more on prospective young entrepreneurs who are also being discouraged to operate in an unhealthy and unethical business environment. The business environment has become too hostile for young and upcoming entrepreneurs.
With the ongoing efforts by Nigerian government at promoting entrepreneurship due to factors such as reduced revenues from crude oil and the need to harness entrepreneurship potential towards sustainable national growth development, there is critical challenge of mandatory incorporation of ethical principles into business practices as a way of enhancing sustainable entrepreneurial development in Nigeria. There is no doubt that entrepreneurship has been globally acclaimed as antidote to growing unemployment. It is capable of instigating growth towards
sustainable  national development. Beyond the call by government for inclusion of entrepreneurship into the curriculum of Nigerian educational institutions and the momentary policy directives by Central Bank of Nigeria (CBN) for commercial banks to develop Entrepreneurship Support Schemes (ESS) in their financial intervention mechanism, there is strong and urgent need for enterprises in Nigeria to imbibe ethical practices as compulsory operational requirements in order to attain sustainable entrepreneurial growth and development.
It is the position of this paper therefore that if Nigeria is to maximize the benefits of entrepreneurial activities, enterprises in Nigeria must cultivate ethical practices in their operational praxis. The problems of unethical practices have caused the death of many businesses. The lack of ethical practices has militated against Nigerian entrepreneurial development. Far more importantly, the features of emerging economy included global outlook in  which success oriented businesses and entrepreneurs must take on character of international posture and the major
imperatives for global entrepreneurial operation is ethical practices. The exigencies of global business moral order has also make it mandatory for enterprises across every nation (Nigeria inclusive) to operate within the confines of ethical expectations both in local and international contexts. The sustainable development of Nigerian entrepreneurship therefore must begin to acquire ethical characters

 It is common knowledge that the subject of ethics in business has long been in focus amongst management scholars and business leaders, alike. There is also broad agreement around the world that as a matter of corporate policy, every business organisation should commit itself to operating in ethically sound and transparent manner. This is seen as part of the social responsibility of business, which hinges on the philosophy that business ought to impact the society in ways that transcend the profit maximisation objective (Dzansi, 2003, Deli 2003, de V Maasdorp & Van Vuuren 2004). The failure of most enterprise managers to operate in sound business ethics has produced the monster: corruption, to rear up its ugly head.
This topic could not have been better discussed than now having witnessed continuous fraudulent practices and consequent despair in our countries, deriving from the all embracing “get-rich-quick syndrome”. It cannot be over-emphasised that our economies can be revived partly through conscientious efforts made both in the public and private sectors to identify the problems of fraud and control them following the principles of ethics, integrity, probity, transparency and effective corporate governance (Deli 2003, Nieman 2006, Robbins 2001).
It is important to present a working definition of important concepts in this paper. The key concepts are: unethical practices, bane and enterprise management. We shall begin by defining the concept of unethical practices. The many faces of unethical practices have been tagged under the umbrella name: corruption. Corruption could be variously defined. It is the use of public office for private gains: “use of unsanctioned means to achieve unsanctioned ends” (Johns 1996). In a broader perspective, it is the misuse of office for unofficial ends. Corrupt acts include but not limited to (Asemota 2003): bribery, extortion, influence peddling, nepotism, fraud, embezzlement, abuse of power.
Bane could be defined as the “pest” destroying the effective management of both human
 and material resources in an enterprise.
Different meanings have been attributed to the word “Management”. Management is defined as “the process of getting things done through other people”. Scientifically, management can be defined as the co-ordination of all the resources (human and other resources) of an enterprise through the process of planning, staffing, organising, directing and controlling in order to attain organisational objectives (Robbins 2001).

Universality of management, therefore, addresses the principles of management as generic rather than specific. Consequently, management function is identical in all forms of organisations whether it is profit making or not-for profit organisations (Robbins & Decenzo 2001). This is so because all managers perform the same type of functions. Additionally, people who occupy management positions plan, organise, staff, direct and control. Managers get things done through and with their subordinates. Their principal responsibility is to achieve organisational objectives and goals through team or group efforts. The concept of the universality of management implies that all managers irrespective of their position in the organisational hierarchy perform at one time or the other identical functions (Yalokwu 2002, Robbins & Decenzo 2001). This paper will therefore examine unethical practices in organisations and management strategies adopted to curb corrupt practices. The paper is divided into four sections. The first section analyses causes of unethical practices, which disable effective enterprise management. The second section examines consequences of unethical practices in enterprises while the third section looks at the roles of employer, employees and challenges faced in managing businesses ethically and the last part offers steps for managing ethical behaviour in organisations, for overall enterprise and community development.

1.2     STATEMENT OF PROBLEMS
The conduct of business in many Nigerian organizations is inundated with a lot of unethical practices. These unethical practices include cheating, lying, using faulty scales for measurement, deceiving the customers/clients, etc. On the short run, the effect of this conduct is quick profit which is ephemeral. On the long run, however, the effect on the organization include bad reputation, loss of customer loyalty, and low profit generation. Besides, it may trigger off high employee turnover essentially because some of the employees may lose confidence in the management and decide to leave the organization.
In addition, foreign investors may be unwilling to invest in the country. The net effect of this ugly act is low economic growth and development. Based on the above scenario, therefore, this paper seeks to investigate the effect of unethical practices in selected business organizations in Nigeria.

In the bid to maximize profit in the prevalent get rich-quick syndrome of some fraudulent entrepreneurs, some indulge in ill-practice of advertising. These unethical practice thus, endangers the well-being of the society and the Nigeria culture in particular. Absolute social responsibility to the customers of advertised goods and service is not ensured due to the fact that buyers are often misted by chronic imitators. As a result of a lot of people haven fallen victim of the unethical practice of advertising known as passing off.
1.4     RESEARCH QUESTIONS
To provide a framework for eliciting solution to the research problems, it is necessary that some research questions be formulated.
A number of research questions are hereby given below for this reason.
1.    Why do some advertisers neglect the ethics of advertising practice?
2.    What effects have unethical practice of advertising caused?
3.    Has APCON stipulated any measures to curb illegal advertising?
4.    Does advertising lack professional application?
5.    Why are the media involved in promoting illegal advertising?

1.3       OBJECTIVES OF THE STUDY
The broad objective of the study is to ascertain the cardinal reason that propel people to exhibit unethical practices in the conduct of their business so as to determine its effect on corporate image and profitability of the organization.

This research work aims at bringing to limelight why illegal practice of advertising is on the increase. That is evaluating why some advertisers neglect the laid down ethics of advertising to pass through the “backdoor” it would also pin-point the set of advertisers who practice advertising unethically.

Most importantly, it would look into the extent of effects unethical practice of advertising has caused. This study would also more whether APCON has devised other strict measures to penalize illegal practitioners.
1.5     STATEMENT OF HYPOTHESES/DEVELOPMENT 
For valid and effective work on this topic, the following key research hypotheses would be addressed in the course of this study.  There are two types of hypotheses, the Null hypothesis that takes the negative form and the Directional or Alternative hypothesis that takes the positive form.

Let H0    stand for Null hypothesis
Let H1    stand for Alternative hypothesis

H1:   Some advertisers neglect the ethics of advertising practice.
Ho:    Some advertisers do not neglect the ethics of advertising practice.
H2:  Unethical advertising practice has effect.
H0:  Unethical advertising practice has no effect.
H3:  APCON stipulated measures to curb illegal advertising.
H4:  Advertising lacks professional application.
H0:  Advertising does not lack professional application.
H5:  Media involves in promoting illegal advertising.
Ho:  Media do not involve in promoting illegal advertising.

1.6     SIGNIFICANCE OF THE STUDY
It is the belief of the researcher that this study would serve as immense useful purpose to its potential and prospective users. Students, scholars, consumers of goods and services policy makers, advertisers, advertising agencies and advertising researchers would stand to gain a lot from the facts contained in this work. This study upholds the high standard of an ideal advertising practice and therefore benefits the advertisers and feaming consumers of advertised goods and services. It serves as an eye opener to a good sense of advertising because the interest of the consumers is paramount.

After close study of this research work, the evil effects of unethical practice of advertising will be drastically reduced, if not bought to an end.
1.7     SCOPE OF THE STUDY

1.8     LIMITATIONS OF THE STUDY
It is important to point out that the scope of this study is to the vitafoam Nigeria Plc to determine the effects of unethical practice of advertising in Nigeria.

The case study is a renowned company which produces quality mattresses, cushions, pillows and upholstery sheetings. The researcher’s choice of this area as her scope of study is for her generate data capable of representing the needs find answers to the research questions.

Also it is to use a company that has the same business and environmental characteristics with the within the target population. This is to a largest extent will lead to the validity and reliability of the instruments used for the study.

Despite all these opportunities, a lot of obstacles were encounted by the researcher during the process of putting the project together.

Among them are:
a).   Time Constraints: A limited time frame was allotted to the research for gathering of data and sourcing to research materials.              
b).   Finance: Money was required at all stages of this study but could not gotten easily.
       Effort was made by the research to ensure that the research was carried out under conditions that led to scientifically valid conclusion despite the financial problem.


This study is aimed at investigating the impact of smuggling on the performance of our local industries (Wood Works Furniture, Abuja) as a model organization was used.
Because of resource constraints, Wood Works Furniture, Abuja, was studied.  All the department and cadres of employees will be covered in the study to examine the impact of smuggling on the performance of  Wood Works Furniture, Abuja.


LIMITATIONS:
The researcher faced the problems of confidentiality. Wood Works Furniture employees sometimes were not willing to give information. Although this problem was dealt with by the researcher assuring members of staff that the information given will be used only for research purposes and was to be treated as confidential. Another limitation was Time. The researcher is a worker, a mother and also doubles as an entrepreneur. Time is not always enough due to multiple events going on at the same time.

Finally, financial constraint was another problem faced by the researcher; money to buy books, stay connected online, moving around to various libraries etc. was one of the major limitations.  But be it as it may, the researcher gave the project its best.

1.9     DEFINITION OF TERMS
The following are the definition of terms used in this study, they include;
EFFECTS
The word effect can be defined in two dimensions. On one hand, it could be regarded as negative and on the other hand, positive. Effect is the negative, what affect the vitafoam in Nigeria in terms of advertisings both in positive and negative.

The Oxford Advanced Learner’s Dictionary explains effect in the form of change that yields a result. For instance, one can ask, what is the effect of your discussion? But for this work, an effect means the negative results of unethical or unprofessional practice of advertising on the consumers.

UNETHICAL
This is obtainable when there is a deviation from what is supposed to be. That is to say that one may have exhibited an unacceptable behaviour against ones organization or society where the person finds himself.
Negative practice by vitafoam advertisers in Nigeria.
To this end, unethical here means paying no regard to the laid down principles of advertising.

PRACTICE
When we say practice, if entails the practicality of what is said, as in theory and practice. In football, for instance, there is a time when the players are told what to do with the football. And they yet to perfect in those lectures by practicing what is taught them.

ADVERTISING
Advertising, like other promotional techniques informs, persuades and reminds. It can change consumer’s, beliefs, attitudes, images, and behaviour. But for advertising to be effective on a national level, enormous expenditures are required. Advertising is a giant industry.

Advertising is an avenue of creating awareness of vitafoam in Nigeria.





NIGERIA
It is a geographical entity or area that we practice advertising. It is also a continent in African or a country in West Africa sub-region within the African continent were advertisers shows unethical practice.

VITA FOAM
It is a company which practices advertising of foam in Nigeria. A company under the Nigeria study of foam advert.









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