EFFECT OF EXTERNAL ENVIRONMENTAL FACTORS ON SMALL SCALE BUSINESS MANAGEMENT
ABSTRACT
The purpose of
this research work is aimed at viewing the effect of external environmental
factors on small scale business management. The
study is design to provide a comprehensive information on the effect of external environmental factors on small scale
business especially how it affect the growth of the businesses in Nasarawa
town. Primary and secondary data methodology was used to obtain the required
information through questionnaire, interview and source document. The research
findings reveals that ignorance of investors on the effect of environmental
factors before investing on the business may cause business failure. The
researcher therefore recommends that small scale business owners should
appreciate that external environmental factor could lead to business failure or
success. They should aim at achieving a way of following the changing factors
in order to avoid the bad effect it could cause.
CHAPTER ONE:
INTRODUCTION
1.0 INTRODUCTION
Small scale business is as
old as men, because as we all know, businesses has been going on since the
history of man. So, in this research work, we are going to take a good look at
effects of external environmental factor on small scale business management in Nigeria.
Small scale businesses in
Nigeria became more
pronounced during the coming of the Europeans into Nigeria in the name of spreading
the gospel on the abolition of slave trade.
The Federal Government
Industrial Policy of 1989 defined a small business as “any business that its
total investment is between N10,000.00
and N2 million naira exclusive of cost of land but including working capital.
Some of the external
environmental factor which affects small scale business in Nasarawa state and Nigeria at
large includes: physical environment factors, economic, social technological,
cultural, demographical etc.
Therefore, this project
work is aimed at scanning those external environmental factors properly in
other to become successful in undertaking small business in Nigeria and to
manage it property.
The external environmental
force and nuisance experienced by small scale business are more than what meet
the eyes for instance, between 1984 and 1985, the government of Buhari took
street kiosk and traders by surprise when their businesses were swept away
without compensation. Again between 1990 and 1992, religions riots culminated
into burning and looting of businesses of native of Bauchi, Kaduna
and Kano.
However, the story is the same in Lagos where businesses under overhead bridges
in Oshodi bus stop and other locations
in Lagos fell into the hands of the federal government while businesses with telecommunications service
throughout the country were closed down without prior notices to the business
owners at the time when means of
telecommunication were out of the common
man’s labour market and deprived the poor masses of communication.
Moreover, what is more worrisome is the persistent of
religions crisis that has continued to spill like wild fire with resultant effects
of consuming small scale business
owners and their businesses thought looting and burning. An instance an be cited at the recent ethnic and religious
crisis between 1991 and 2001
which took place in Kano, Kaduna, Jos, Benue, Kogi and Nasarawa state.
As we all know, the aim of small scale business management which is to create
job opportunities and elimination of poverty in the economy. The external
environmental factors that affects the business can be categorized via (PEST). Political Economical, Social and Technological.
Since one factor can affect another factor, there is an interrelationship among
them. All businesses are influenced by changes in one of the environmental
factors. Some of the important changes that affect managerial decision making
of small scale business are zoomed critically in this work.
As the topic implies the
effect of external environmental factors on small scale businesses. Government
policies has been one of the major problem facing small scale business as well
as poor implementation of its policies. The political instability in the
country as a result of tribal sentiments is directed to small scale business.
There are other factors like economic, social and technological factors.
This research work is
restricted only on those external environmental factors that affects small
scale business in Mongoes ventures Nasarawa state. It refuses to touch the internal
aspects of environmental factors the emphasis is to identify the effects of
these environmental factors or forces and provide possible solution to handle
them.
The general aim of this
project is to examine the effects of external environmental factors on the
organization performance especially small scale business operation like Mongoes
ventures Nasarawa.
Some of the specific
objectives are as follows:
(a)
To identify
the business environmental factors
and how they affects the performance
of business
(b) To determines ways or methods of
managing external environmental factors by small business
(c)
To
identify and define factors to make room for stability, profitability, harmony,
peace and comfort of small scale business.
It is important to note
that this project work is aimed at identifying
the values of starting a business career without facing much problems that may
come from external actors.
This project work can
contribute significantly in the following:
(a)
It
will be of great important to government in their role of
developing small business by identifying and applying environmental tools analysis
(b) Potential entrepreneurs and small
business owners would appreciate the
role of environment in business
(c)
Researchers and students will find this project worthy while
Some of the research questions were
effort shall be made to find answers to this study include the following:
(a)
Does
the external environmental factor have great impact on the growth of small
scale business in Nigeria?
(b)
Does
the external factors affects the
organizational productivity
(c)
Does the organization manage those external
environmental factors so as to achieve the organization aims and objective
Hypothesis which has been defined by
various authorities to be a tentations statement, assumption of conjectural
statement which can be true or not and cannot be generally accepted until when
proven.
Hypothesis can be classified into two
hypotheses
a) Null
or negative hypothesis (Ho)
b) Alternative or positive hypothesis (Hi)
The following hypothesis will be
tested in this research work.
Ho: The external environmental factor have no impact
on the growth of small scale business in Nigeria
Hi: The external environmental factors have a
great impact on the growth of small scale businesses in Nigeria
The major limitation of
this project is the difficulty in obtaining data as a usually the case with
most project work. The lack of data is
further compounded by the fact that the researcher has a very tight scheduled
programme. For instance, time is too
short for the research considering the time within which to submit the project
combined with tight academic work load could not enable me to carryout wide
research on the general environmental impact on small scale business.
Finance is another
hitch encountered during the
course of study, in adequate availability of research materials and some
vital information which they called “Top Secret” in many case
study Mongoes Ventures not given out which could have been of great important to the success of this work.
The definition of term used this
project stated below:
§ Business:
Business is any legitimate
activity or activities embarked
upon by an individual or group of individual
or group of individuals for the
production of goods and distribution of services for the satisfaction of need as and wants of
the people for the purpose of making
profit. (Ben A. Ogedengbe, 2007)
§ Small Scale Business: It is any business that has a total investment of between N10, 000 to N2million exclusive the cost of land but including working capital or it can be seen as any business that
independently owned and managed, started with little capital and operated with
few employees to produce goods and services to the people at a profit. By (Ben
A. Ogedengbe, 2007)
§ Profit: It is
the rewards of an entrepreneur for investing his money and time. It is also
seen as the additional surplus that a business gets after deducting the entire cost
incurred in the business. By (Ben
A. Ogedengbe, 2007)
§ Culture: It is
the total collection of people beliefs, customs, knowledge, art, moral and
other attributes that are accumulated by individuals of a particular
society. By (Balkin 2002:98)
§ Product: it is
any tangible or intangible thing that is capable of satisfying peoples want and
needs. Includes goods and services. (Ben
A. Ogedengbe, 2007)
§ Technology: It
means modern method applied to materials in production of goods and series it is the
practical application of research
and discovery which results in
a bright
standard of living and increase productivity. By (Onuoha 1999)
In this chapter, the
researcher is going to look at the various materials used in the process of embarking
on the project work. In most instance,
an effective manager does not only
concern himself with the internal
(inside) environment alone,
but he must also deal with the external (outside) environment that may affect the organization in one way or the other (Bogobivi
and Kassah 2009).
The contribution of small
scale business to the development of a country is generally acknowledged,
entrepreneur in this sector face so many obstacles that limit their long-term survival and
development in general. (Wolfenson 2001) business environment is a process that
deal with the interactions of managers and their sub-ordinate within the environment
of organization (Fabayo 2009).
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