LITERATURE REVIEW AND THEORETICAL FRAMEWORK
2.1 Introduction
Much was said in the first chapter about
the necessity to take into account the changing economic environmental and
management ability to manage it. This chapter deals with a review of various literatures
and theoretical framework. Pertinently, this chapter used more of secondary
data from text books, journals, government gazettes, University of Abuja
Business and Management’s journal, previous related works etc. and emphases were
made to 2014/2016.
2. 2 The Changing Nigeria’s Economic Environment
Environment is the
totality of the surroundings of the organization for wider concept. Harrison (2005)
defines environment as all the conditions circumstances, and influences
surrounding and affecting the development of the total organization or any of
its internal systems. He argued that environment contains forces of complexity
that are dynamic to varying degrees at differences, and under different
circumstances.
Atsegbua (2002)
described environment as the system of abiotic, biotic and interact and
simultaneous to which he adapts and transforms and uses in order to satisfy his
needs.
The Black Law
Dictionary (6th edition) physical, economical, cultural, aesthetic
and social circumstances and factors which surround and affect the desirability
and value of property and which also affect the quality of peoples’ lives. The word “environment” is used to describe all
those influences that bear upon the business organization.
Bernard (2009) notes that
environment consists of atoms and molecules, agglomerations of things in
motion, laws of men, emotions of physical laws, social laws, social ideas,
norms, action, of forces and resistances. Their number is infinite and they are
always changing. The nature of the
constituting the environment often confronts management with the need to make
decisions under considerable uncertainty. The dynamitic nature of variables
that are seldom well identified their controls over the outcomes of events
initiated within the organization are also complex. However, the frequent lack
of control does not mean that management should disregard the
environment, but rather that it must undertake continuous surveillance of the
environment so it may respond to adverse reactions or outside changes and be able
to manage them Aguilar and Osaze (2009).
Every organization must
exist in some extent; no organization is an island unto itself. Each
organization has goals and responsibilities relates to others in its
environment. Not only must or organization deal with its environment in managing
and coordinating its affairs, but it is
must also give consideration to the goals of others, as it establishes its own
goals and conducts its operations Oyebanji, J. (2015).
As a concept, economic
environment is regarded to be a complex and important consequent, the concept
has been addressed in a number of ways by different scholars. For example Ola (2003)
seems to believe that the Nigerian economic environment is phenomenon that is
too complex and too varied to be captured by any one definition. The important
of the Nigeria economic environment has
been attested to by numerous scholars such as Oyebanji (2015), Lawal (2001) and
Aldrich (2004).
All these scholars have
discussed extensively that the Nigeria economic environment is every changing and
it’s an important process to influence on a group in particular situation to
motivate others to goals achievement. Environment in management does not mean
the surrounding but it covers the factors of forces that affect business
effectiveness in the process of producing an intending result.
Oyebanji (2015) defined
economic environment as those factors that can influence the individual’s
business organization. He stressed further by saying that every organization
must take into consideration the environmental constraints, material and human
resources in their respective business in spite of their differences in status
and that the effect of the environment caries from one situation to another. Ola (2003) classified Nigerian economic
environment as the “Nigerian Economy” since the businesses are established and
managed within an economy. He was of the opinion that the state of affairs has
a significant correlation on the business within that economy. Oyebanji (2015) further testified that
Nigerian economic environment has witnessed a total change, which started from 2014
due to political power tussle and the struggle for power which eventually brought
in APC to be the pilot of the Nigeria’s affairs.
Aldrich (2004) said business
environment was made up of stable and unstable homogenous, heterogeneous, rich
and poor, complex and simple, unpredictable variables. He further stressed that
the Nigerian economic environmental factors change along with factors of
production and environmental influences may be stable over a certain period of
time.
He asserts that the
manager’s basic role is to be able to manage and control the organization in
the difficult and emergency period. Changes take the form of adaptation. The
manager must perceive the process and respond to a changing environment by
re-arranging the internal organization structures so as to ensure survival and
effectiveness Ubeku, A. (2001).
The need for studying economic
environment is important considering the fact that business organization do not
operate in a vacuum, effective management to complex and dynamic society
requires the assessment of strength and weakness of the organization and the
opportunity and threat posed by the challenges of the external environment. For
survival and growth, organization must adapt these changes Ola, C. (2003).
2.3 Characteristics of Changing Economic
Landscape
Below are some Characteristics
of Changing Economic Landscape in Nigeria with their respective peculiarity:
Economic Landscpe is Complex: Economic Landscape principally consists of a number of factors,
events conditions. These are influenced to different departmental source in the
organization. These conditions are not exited in isolation and create entirely
new set of influences which are interacting with each other. All
these factors have to be considered as environment analysis is complex and
rigid and totally very difficult to grasp by the functional manager and top
level employees in the organization Adeniji, A.A., & Osibanjo, A.O.,
(2012).
Economic Landscape is Dynamic: Economic and its Landscape
are constantly changing in different nature. Micro and macro landscape factors
are influenced to business organizations. It impact to change on the business
conditions. Dynamic landscape is flexible and dynamic nature in company. Strategic
manager can shape strategy and formulate short term and long term objectives Baines,
D. (2007).
Economic Landscape is Multi–faceted: Strategic observer can
shape and observe different character of economic landscape. Strategic observer
to observe a particular change or latest development in the business. It may be
viewed with different opinion from different observes in the organization.
Economic Landscape has a far reaching
impact: Landscape
impact is essential ingredients for strategist to study changes and take
appropriate decisions at appropriate time. If strategist neglect to take
appropriate decisions at the right time, it creates negative impact to the organization
as the survival, growth, profitability and development of organization depends on
strategic analysis of the economic landscape. Economic Landscape has new dimensions impacts on
business organizations Doyle, M. (2002).
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