University of Nigeria Research Publications

OKPALLA, Onyinye Ukamaka N.

Aut

hor

PG/MBA/03/37692

Title

Corporate Strategic Reengineering and Repositioning in the Nigerian Manufacturing Industries (An Appraisal Study of Nigerian Breweries Plc)

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e

March, 2005

Sign

atur

e

UNIVERSITY OF NIGERIA

TITLE PAGE

CORPORATE STRATEGIC REENGINEERING AND REPOSlTlOMlNG IN

THE NIGERIAN MANUFACTURING INDUSTRIES (AN APPRAISAL

STUDY OF NIGERIAN BREWERIES PLC)

A RESEARCH THESIS PRESENTED TO THE DEPARTMENT OF MANAGEMENT, FACULTY OF

BUSINESS ADMINISTRATION, UNIVERSIIY OF NIGERIA ENUGU CAMPUS,

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTERS IN

BUSINESS ADMINISTRATION (MBA IN MANAGEMENT)

11

CERTIFICATION

OliY;II,I,A ONYINYE (IliANIAKA N., a postgraduate student of

thc Tkpiwlnwnt o f Management with registration nurnber

f'(i/Mt3,4!03/37092, has s~~tist'actorily completed the r-equirements of thc

cowsc :~nd research qrorli li>r the award of' Mastcrs L>egrec in Busincss

Acim~riis~ratron (M HA i n Management)

I'hc \vorlc c~nbodied in this report is original and has not becn

submitted In part or Iull for any olher Diploma or Degree of this or any other

university

HZ. 'Ilief ,I.!-\. Eze Dr. IJ.,J.F. Ewurum licud of' Dcpnr-trtzctz t

. . . 111

DEDICATION

I ' l I i:, ~hcs ib I > dcdicatccf to Aln~ igh ty God, who i s thc esseltcc of niy

hc~ng, and had given mc Grace to accomplish this work and lo my

benwolenl parents, Chief & Mrs. 0 .C ' . Okpalla.

ACKNOWLEDGEMENT

course of this work. tie cnabled me through His grace and guidance to

accomplish this goal.

M y p~.ofi)i~nd apprwiation to niy s~ipcrvisor C1iigf'J.A. Ezuir, I'or his

tscmendous and uscti~l advice. making himself available and accessible at all ,

ti111, inspilc of time constraints.

i also wish to thank Oziomu Lilliun Ezennqv for her support as

wil. silt. made my stay irt Enugu comfortable during this programme.

I irnrncnsely o w a lot, lot of thanks to my parents. Clriqf'urzd Mrs.

0.C. Okpullu. \ \ho havc stood besidc me in all I do, contributing thcir moral

and I'inancial sl~pport. sl~owesing me with love; care and understanding. I

lo\,e yorl n ~ u m and dad, may you live to reap the fruit of your labour in Jesus

\'

ABSTRACT

('orpuratc stratcgic rc-engineering and rc-positioning inwlves thc

r.cju\/enations or resuscitation of an ailing or falling enterprise or the crafting

, i r d i~~~l> lc~~lc~ l lu t ion 01' enterpr.~sc better able to meet up i n the currer~t

cl~irllcngcs and fi~turc dcvttlopment. The need for this process in today's

corporate world cannot bc over emphasized because one can hardly find a

virilc and thriving business organintion that does not, in one way or the

other. ~ p c r a t t ' with long tcrm objectives of consolidating compet~tive

advantages and growing market share.

-. I his work focused on the evaluation of corporate stratcgic re-engineering

and I-cpositioning and ho\i/ the ulickrstanding of the subject \vould assist

~ l ~ a n l ~ i . i ~ ~ t ~ ~ ing organi/ation in Nigcria towards thc achicvcmcnt of'

suslalnablu gro~ltti and development.

This prqject also trics to see the extent of which re-engineering and

~-cpvs~ t ~ o n ~ n g a t'fkcts the perfi~rmancc of N igcria Manul'dcturing Firms, by

siudying thcii. various characteristics and measures of evaluation. The

researcher highlighted on the importance of corporate strategic re-

c~lp,illccring, thc cause of'extinction or retrogression of some manufi~tiiring

outtits in higcria and thc value of sustainable long-term growth and

development strategies

V I

'1'11e I-csearcher appraised the pert'olmances of the Nigeria Breweries Plc

during Iier course of study.

('hapter o w introducrs the project topic highlights on thc

bacl~~round, stat~ng wrioi~s problems affecting the course of study and tlie

need and obiectives of the study.

('Iiapter two entails the review of the related literary works of somc

authors and contributions to the subject carried out so as to build a

l'oundation llpon which tlie research is done.

111 chapter three thc rescarclitx malyzed the design and methodology used

In the collection and malyzing of the data ~ ~ s e d for the study.

('Iiaptcl- bur treated and discloses the presentation, analysis and

interpretation of' data. also tested the hypotheses that were forn~ulated.

('hapter tivc summarizes. recommended and concluded the findings of

thc study.

I his rcsearch wwk rcvcaled that the successful implementation of

corpratc strategic ~.c-ungiilce~-ing and repositioning by man~~fiwturitig i-irnis

iri Kigcria is u sine qua non Ibr success, si~stai~iability, development,

PI-olitab~lity and go\\ t11 of many nx~nuf'acturing industries in and outsidc

1 igcrix.

TABLE OF CONTENTS

. . . V l l l

CHAPTER TWO

1,ITEIIA'I'I IRE REVIEW 2 1

Ih'1 I<OI)I IC'T'OKY 0VI:KVIEW 2 1

( 'ORPORA 1'E: STRATE(;Y 22

ORIGIN. CONC'F,P TS A N D MEANING O F RE-ENGINEERING 30

DRIV I&(; FOII('I:S O F I<EI~~WGINEERING IN INIII 'S'I 'RII~S 43

I'IIIK('II'1 ,ES 0 1 : I<I~ENC;INEERING 47

I<I~b,N(I;INt.,tKING A N D C'ORPORATE C U L T U R E SO

IMPl,l~i\/lEN'TATIOh O F RI~ENCiIKEEKING 53

I3III~N(~INIEtJRINC~ SI!C't'ESS FACTORS 54

1'1 IASES OF S1JN"SSFLJL KEENGINEERING 5 0

('ON('111' 1' 0 1 . l<l' I'OSI'I'IONING 0 3

SUMMARY OF TI IT;, REVIEW OF REIATED LI'TERATII RE 6 5

I<k:FKUEYC'l<S 48

3.5 SOliRC'E OF DATA

3.6 l)I'S('RIP'TION OF QI!I<STIONNAIRE

'7 q('ol'1 Olf. ' I 111. S'I 1' i )J '

l1E:FF:liKNC:ES

(' HA P'l k: R FO IJ 13

4.0 PK17SENTA TION. ANALYSIS, A N D INlERI- ' I~ETA'lJON

01; '1-1 It;, DA'TA 79

4.2 K12,SPONSI:S TO TI IF ADMINISTERED QlJESTIONXAIRE SO

CHAPTER ONE

1 .O l ~ ~ ~ l t O l ~ L ~ ~ ' ~ l ~ l O N

1 . 1 HACKGIIOUND OF Sr1'1II)Y

Yigeria is a country has wit~iessed changing and dwindling fort~~ncs

in hci- cconomic and socio-political scale balances. '['he negative effects of

such vicissitudes on the psyche and the physical conditions of the average

N ~geria are enormous.

1 I, L l i j , ) ~ . , (I L I ~ i l l ) of' lhc Sii/cl.iilil ~CoilOllly ; i d lllot c especially nlosl

n~an~lliict~rring companies i n Kigeria would most probably ~.esiilt i n a

I-welation of the fact that managenlent style and strategies as well as

change.; and variations i n these fi-01-11 time to time, in order to strengthen the

Sounct;ltions 01' the organiration, constitute thc most signilicant and relei~ant

I*i~c~ors tlclermining their continued profitability and sustainability .These

I.i~ch~-s t ~ l s ~ al'l'ectcci thc iota1 cos( o S prod~~ction for theso cumpanics ;IS thcy

I ( I \ C I . I I 111e mii/;illoll of' hCi\l.Cbt' I*C'SOLII-O~S 01' money, men, materials.

n~acliincs. and inhrnation in i~chieving the objectives of thc ol-gani~ation.

Good Management at any level and particularly, at the highcst levels in an

01-gan~/ation. is about managing not just for the present but also for the

I'LII~II-c. (Mmslield 2002:3).Mo1.cover, strategic Managen~ent was described

2 as the p~.occss of' making decision and tatting actions which determines

whether a11 cnterprisc excels. su~.vivcs, or dies (Jauch 2003: 1 )

('o~npmics and other organizations have not been spared of' the

r1ssociatt.d and consequent agoliics of these times. They have witnessed the

I-ctrop-csslon or complete demise of a lot for the past years ~ncludi~ig both

;\/lanuf'i~turi~?g and TI-;ding ('ompanics and Financial Institutions. Some 01'

tllcsc include:

Ajaoltc~ta Steel liolling Mills

1)iamond B1.eweries Pic

Afi-ican Continental Bank

C'o-operative and Commerce Bank

i'rcn~ier Hre\vcries Plc

Sona B~-e\\,cr.ics Plc

Heree N igerix I ,td

batronai f:crtilixr C'ompany of N igeria (NAFCON)

Alum~num Smeller ('olnpany of Nigeria (ALSC'ONO)

'I'licsc companies tliat s~~rvived have developed

app~-oacheb and implemented strong corporate, re-engineering and

~-cpwit~o~iirig stralegies and ch;mges tliat are different from tlic ~iianagcmcnt

btyles ol'thc 1070s and 1080s. In thc last decadc ofthc twentieth century thc

thcsc cliangcs and new stratcgics. which have often resulted in positi\,e

growths in profitability and survivability of such organizations that haw

ilnplcmcrited them.

h~gcrian HI-c\vcrics Plc was incorpor-ated in 1940 and has five

brewcries scattered all over Nigeria. The company has breweries in Lagos.

Aba. Knduna. Ibadan and Enugu. The Enugu brewery was opened in 1093

about the same period when the country was passing through a serious and

turbulent political test occasioned by the annulment of the presidential

election or that year. The plant \vas obtained by acquisition as an expansion

and horimnlal ~ntcgration strategy from the defunct Diamond Rrcweries

1.1mitcd. lii~iipu. I t is siluiitcd in the 0 Mile Corner. The collapse of the

Diamond Breweries Limited was as a result of large scale t hnc i a l

tnisappl-opriatioti.

01-ganizational inadequacy coupled with adninistrutivc and

managerial ineptitude. Thc acquisition of'the brewery by Nigeria B~.e\verics

I'lc was incongr~rent with the manner in \vhich the other f'oi~r breuwies \vere

devclopcd. I'hc brcwcry has been res~~scitated by the now managen7ent 01'

higcrian 131.txw-ics I'lc restoring and creating jobs for peopleand in

4

addl t~on becoming a huge source of revenm generation for government,

\ idc lavcs and Icvit.5.

tIitherto. Nigerian Breweries had experienced other major ~ ~ p h e a w l s

in the COLII-sc of operating in Nigeria. One prominent example was the total

ban on the importation of Malted Barley in January 1988. Malled barley

bcfore then used to be the main ingredient of its beverages. With timt', the

cornpang wccessfi~lly shifted to the use of sorghum as the main ingredient.

I hi, cntwilcd mqor changes i n processes, e q ~ ~ i p ~ n e n t and personnel training

prograrnmcs. 'I'lie con -~pa~~y has gone through these and many more internal

iind extcrn;\l inlluences but has successfully sailed through and in fact has

had a stcady growth pattern while other similal- industries arc backsliding

(Ikimc 2001: 110).

The major pl-oblcms facing most organization i n Nigeria today are

corruptio~i and niisn~anagemcnt. Nigerian Breweries Plc must have had her

ou n sharc 0 1 ' thcsc, but in sp~te of tl-~cm, she has survived. The Followi

issucs no\% bccome pertinent:

i) Rcstr~~cturing and upgrading 01' the breweries to meet world- cli

standards.

i i ) Managen-~ent of the various resources available to the brewery.

5

i i i ) Orientation of the ~\lorl< force towards the achievement of high q~~al i ty

products.

-1 he above issues are those that motivated this study. The strategic re-

engtncertng and repositioning activities especially came to mind. I t bccomcs

important to see how the brewery has been able to cope with the national

malaise 01' gross ~nismanagemcnt and corruption all around. l'he issuc of

twt I ~ C ~ I W C C I ~ hi^^ been ablc to organize hcr operations to catch up with

glohal standards is also very important. These and other issues that will bc

highlighted in thc course ot'this stcrdy occasioned the desire to work oil the

project of "CORPORATli STIIATEGIC RE-ENGINEERING A N D RE-

I-'OSI'I'IONIN(~ IN '1'1 IE NI(iI<RIAN MANUFAC"1IJRINCi INIX ISTRIES

(A% APPRAISA 1- Sl'l lDY O F NIGERIAN B R E W E R I E S PIX')".

1.2 Sl A ' l ' K ~ l ~ ~ ~ ' 1 ' OF '1'HE PROBLEMS

'I'hc managcmcnt stylcs in r n a n ~ ~ f c t ~ ~ i n g companies in Nigeria

especially in the light of the turbulent, irnpredictable and ~rnstable market

environment calls for proper planning good Sore casting, and prudent

[ c~ourccs nlanage~iiellt techniques. '1 his wi 11 resuit in continued sustenance

of production. competitiveness, consumer satisfiction and more over set the

company on thc estee~ned path o t ' f ~ ~ t ~ i r ~ profitability and growth.

G

STATEMENT OF THE MAIN PRORLEM

'I'hc main problem of this study is the harsh economic climate in

Kigeria. which has led to the folding ~ l p of many manufacturing conipanics

cvcn n llile others like Nigeria Hrcwxies PIC are growing h r n strcnglh to

strength.

IIcre is the problem of proving that a focus on the ultimate

sai~sfaction ofttie consulners can lead to the revitalization or sustenance of a

bus1 ncss.

Sub-problem 2:

Anoiher problem I S showins if there is a relationship bctwcen re-

cngineer~ng and repositioning of' a business through [lie acquisition of

modern cqu~pment and technology. and business sustenance's growth.

Sub-problem 3:

12 thrrd problem is ho\\ to verify whether growth in market xht~res o f

LL munut.acturmg concc~-11 ~esults from corporate strategic re-engineering and

rcpusitioning activit~es.

7 1.3 OBJEC'TIVES OF 'THE STUDY

This study aim(; to detcrminc and itnalyx the various aspects of IT-

cngineer~ng and repositioning executed in Nigerian Breweries PIC, which is

a mcmbcr of thc Nigcrian Manuhcturing Sector (beverage production). It

w A s to examine changes in thc level of technology employed and other

changcs and steps taken in improving the daily managenient of the business.

In addition it will also show if there is a strong relationship between

improvement in the general management capabilities and successes in the

\arious re-cnginecring and repositioning exercises. According to Brech

(2003: 3 ) "'l'echnology of ~tself' has no inherent motive power ol'economic

- - or social progress. l his man has to supply by personal skills in direction

coordination and control personal skills of leadership and commercial

acumcn, the abilities of some mcn and \voman to impel progress by their

inllnence on and over the activities of their follow beings in the business of

living".

I n summary. the importance or objectives of this study arc.

1 . I o highlight the relationship between effective re-engineering ancl re-

positioning to the maximization and optimization of the wel-11th oi'the

company.

8 7 -. '1'17 highlight thc impedinients to sustainable growth and development

i n the manut-i'act~iring sector-.

3. To ascertain the long-term implications of effective re-engineering

and reposi tioning practices

4. I'o evaluate the processes of re-engineering and repositioning in the

management of a munutjcturing company.

1;inally. i t is thc aim of this study to make suggestions, which will

assist other n1anuSxturing conipanies in the execution ol'corporate strategic

re-engineering and repositioning practices so as to improve sustainability

and profitability.

1.4 SIGNIFICANCE OF STUDY

.['he Sol iowing will benefit directly from this project:

r ('orporate rnani~gcrs of Xigerian Breweries Plc

Y ('orpornte managcrs of other Nigerian manufacturing companies. both

private and public enterprise.

k Other readers and researchers

r Myscl l'; tlie reseal-chers

While the following will benefit indirectly:

Y 1-he pop~~lation of Kigerian

The government of Nigerian

This project fits into local, segional and national levels in that the

rnannlh~ti~ring companies carryout activities in all parts oi'the country.

I t u i I I carlse i~npro\ c-nlcnts on the perl'or~iiances of corporate

management teams in Nigeria in the Following.

i)

ii)

i i i )

Optional utilization of resource in times of ~~ecession, as is obtainablc

in Nigcr~a at prcscnl.

'1-alie into account the need for sustainable developments ol'

businesses.

'Take into account the nebv global orientation in corporate business

rnanagcnicnt.

'1'0 other ge~ieral ~xaclers the s t ~ ~ d y is significant in arousing interest in

011s cveryday management of change even within our homes. The study will

also Ix uscl'~11 to other rescarchers in the same suejcct or relatcd ones who

will find tlic study a useft11 base for take off'.

k i n d l y , the researcher will be able to make her little contributions

t o ~ w d s better nianage~nent of change and strategies in Nigerian

rn,~nuli~ctu~-i~ig ~ndustry and also lillllls one of the requirements for the

ilward ol' tllc degrcc In view.

10 1.5 RESEARCH HYPOTHESES

I n a bid to satisfy thc ol,jectives of this study, the following

hypotheses haw been developed n8hicli will be tested statistically I'or

I . t o : There is a relationship between ultimate consumer satisfitction

and protltability

, - I lhese is no ~.elationsllip, between ultimate consumer

satisfiict ion and prol-itability.

2. t o : Regular in~provements in productive and technological

capacity are rclatcd to continuous business success.

I : Regular inipruvt.ments in productive and tecl~nological

capacity are not I-elated to continuous business success.

3 . I lo: Growth in company ~narltet shares intluence profitability levels

1 1 , : (;rowth in company market shares does not influence

profitability level.

SC'OPE OF OPERATIONS

Xigelmi;\ Hre\veries Plc. The pionecl- and largest brewing company in

Nigeria, was incorporated in 1946 and recorded a landmark when the first

bottlc ol' STAR lager bcel rolled off the bottling lines in its I,agos Brewery

commissioned in 1057, IGduna Brewery in 1963 and Ibadan Brewery in

1082. In Septe~i~ber 1003. the company acquired its fifth brewery in Enugu.

O n April 9, 2001, it I-eccntly christened the AMA Greenfield brewery i11

I ~ I I L I ~ L I : Ilie largest in Africa. The brewery will be commissioned in October

2003. 7'lius. li-on1 its humble beginning in 1946, the company now has five

all parts ofthis great country.

C'OMYAN)' EQUITY

With abut 00.000 shareholders, the ar~thorixd share capital 01'

%igeria HI-cweries PIC is $41.5 billion. Its issued capital as at 3 1" December

2000 stood at N944, 724,609 divided into 1,880,449,2 18 ordinary shares of

0 kobo c:icti. Hcinckcn N . V . 01' Ilolland has a ni:!jo~-ity sh;~rcholding of'

1 L

54.2'%, while the rest are held by Nigeria amongst who are company

cmployecs of'vilrious cutegories.

The company's tnrnover in yew 2000 was g17.68 billion, out of

which the sum of V0.08 billion was paid to t1x Federal and State

(;wet-nments as taxes and levies. Also, in year 2000, the company's pro13

bclix-e tax was &6.20 billion and i t paid a dividend of 442.98 billion i.e.

BRAND POR TF.'OL/O

Niyria Breweries Plc has a rich portfolio of high quality brands: Star

Beer (1 949); Guider I q c r Beer (1 970); Maltina (1 976) which now hiis f w r

~aricties. (Maltina C'lnssic, Maltina Strawberry, Maltina Exotic and Maltina

~ i i h Pillcappic). 1,cgcnd Ektra Stout (1992); Amstel Malta (1994) iind thc

Schweppes range 01' Carbonated soft drinks launched in I>ecember 1096

(Schu~eppes Bitter Lemon, Schweppes Tonic water and Schweppes Soda

CL'atcr). I'his was followed by the launch of C'rush Orange in November

1907 and Schweppes pineapple Lager in June 1998. However, in August

200 1 , thc company decided to exit the carbonated sol1 drinks marhet

because 01' the need to concentrate on its area of core conipetence. The

S C ~ M C ~ I ) C S ii.i\ncl~isc M i l S thercforc sold off.

13 EXPORT

Sigcria Brewcrics Plc has an increasing export busincss that datcs

back to 1080. ('urrently. ure export to the li.K. [I.S.A.. Italy, Netherlands.

Gcrrnany and Kenya.

RESEARCH & LIEIJELOPMENT

Nigeria Breweries Plc keeps pace with key international

de\~cloprnents, thus ensuring that its systems, processes and operational

p-oucctu~-cs arc ~ I ~ W L I Y S in c o n h w i t y with world class standards. It is in line

with this policy that the conlpany established a Research and I>cvelopment

Centre in 1987 to enhance its resemh activities on all aspects of brewing

opel'i! t I on s.

A NCIL LA R Y SERVICES

As a major brewing concern, the company encourages the

cstablishnicnt 01' ilncillary bu~inesses. Many of thcsc organimtions and

individ~rais depend largely on t l~e company for their means of livelihood.

l'hesc include manuf'actu~u-s of Bottles, Crown Corlts, Labels, Cartons.

I'lastic ('ratus and such services as I IotelsIC'lubs and our key Distributors.

Uigcr~an Brewcries Plc is a socially responsible corporate citizen with

a vesy good record of corpol-ate philanthropy in the areas of education. the

environment anc1 c o n l ~ ~ ~ ~ ~ ~ i i c i ~ t i o r ~ s , among otl~ers. The company in 1994

cstabliclicd a n I'ducation Trust Fund of N 100 million to tale more activc

part in the iit nding of educational and research facilities in higher institu~ion,

all in an cflbrt to psovide and encourage academic excellence in Nigeria.

' l ' l i~i IS in addit~on t o i ts secondary and university scholarship programme

fiv chi1d1.cn of its employees.

Nigeria Breweries Plc is the foremost sponsor of sports by varicty in

tlic country \\it11 sponsorship covering Football, Tablc 'Tennis, Lawn Teonis,

t'ycling ('licss, Golf, Rad~iiinton, Boat Racing and Ayo. 'The aim is to

develop Nigeria sportsmen and women to participate in national and

~ntcrnational sports, and. boost the sports profile oftlic country.

Sigcsian 131-ccvcrics PIC has won several awards as n mark of' its good

pcsformiince in various sphcrcs. It has consist.ently won thc prestigio~~s

Nigcria Stoch I:xcllange President's Merit Award for several years now. I n

2001. it emerged thc winner of the Nigeria Stock Exchange Quoted

('ompany of the Year. it has also uon the Nigeria industrial standards (NIS)

A\\ilrcis li)r its \ arions products. For two consecutive years ( 1 999 and 2000),

t h c company \\or1 the Iwenly contested Afiica Becr Award organixd hy

15 I-1einekt.n for its operating companies in Afi.ica and the Middle East. These

are in addition to several awards fi-om various philanthropic 01-ganizations,

~ I L I ~ s , i n s t i l~~ks and government Agencies, among others.

Nigcrian Hrewcrics PIC is a ~modcl corporate citizen with a vision lo

be a \vorld class company. The company's successful operations can be

traced to good product qua1 ity, effic~ent management of' operations and

strategic penctrution into the ~narltet environment, Others are proper

~~l id~rs t ;~nding of consunier attitudes and habits and high social

responsibility profile at national and zonal levels. (Diary: 5).

Moreover, it i s commonly proclainied that the company is in a

business of pleasure. leisure and fun. The nianaging directol- of' Nigcrian

Hrcuwics 1'lc i n a mcssagc to the cmployces in a housc magazine said. "i t is

tlic lirst iu i l ycal of our lie\\# kxco with a new world class vision Jbr a nen

cra ot'q~~tlntunl improvements in all aspects of our operations"

(Od i~ncgw~ . 2002: 4) this goes to show that the company. Nigerian

Hrc\\cr~cs Pic is engaged in. and itching for more in~provements and

chanpcs.

A t present, Nigerian Breweries operates with a mission statement

atiitcd thus. "I'O 1 1'1 11, l / l BEVERAGE C'OMPANE' IK

'tl(rl*lilA. h4A171<t4: I'IN(; I-IICI I ()~JAL,I'I'Y BRAIVIIS TO I~bLlVt.,I<

S i i PkRIOK CONSUMER SA'IISFA("I'1ON"

PROFIT A N D LOSS ACC'OUN'T

FOR'I'HE YEAR ENDED 31 DECEMBER, 2002

Sclllng and distribution cxpcnscs Administration expcnses

CASH F1.0W STATEMENT I'OK T H E YEAR ENDED 31 DECEMBER, 2002

\cl cash from operations activitics

\ct cash from finaacing activitics

< 'ash and CAI cup~nAents at 31 I h m l w r . ('ash and cash balanccx

I h n i , ovc~dt.a ti

FIVE YEAR FINANCIAI, SUMIMARY

FOR 'I'tl(.: YICAR ENDED 31 DECEMBER, 2002

Mansfiuld. R. (2002) Frontiers of Manaxemelit Kutlcdge. Idondon and Neu

Y ork .

.laucli, L.K. (2003) Strategic Management and Business Policy, 3"' ed.

Mc(;ra\\~ Hill. New York.

Iliimc, 0bar.o. (2002) 50 years of 131-cwcry Excellence: I listosy of Nigerian

Brewel-ies Pic, 1906-2002 Mia Reproductive Itd, Idondon.

13rech. 1:.1~.1.. (2002) The Princ_lples and Practice of Management 1.ongman.

London.

Official Desk Diary (2003) "A profile of Nigeria Breweries Plc".

Od~megwu, F.R.O. (2002) "Froni the Managing Director and Chief

1:secutive Of'iiccr" In Nib~wv ---L3 News October - Dece~iiber.

Annual I<cports and Accounts 2002. Nigerian Bsewcrics Plc.

Balance Sheet 2002. Kigerian Breweries Plc.

1'1.oli1 and 1,oss Accounts 2002. Nigerian Breweries Plc.

C'asli 14lo\\ Str~~emcnts 2002. Tigerian Breweries Plc.

Fice Year Financial Sumniary 2002. Nigerian Breweries Plc.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 IN'I'KODUCTOIIY OVKKVIEW

Nigeria. is an oil producing nation; with the cr~tde oil c'onstit~~ting

over 80% of' our total national revenue. I t is supposed and rightly to be

amongst h e rich nations of thc earth with her citizens ctijoying a high

standard of living.

On the contrary, in Nigeria. the sit~lation is that of depression. high

inflation ratc, low p~ircliasing power, increasing poverty level, worsening

u~~cmploymcnt situation and stcady disappearance 01' in~eresl in ILIYLII-y

goods among tlic masses. As such, business concerns, especially ~ I I O S L '

rnvolvcd in tlic rnanu('act~ire of luxury goods are linding it more and more

difiicult to survive and grow with each passing day.

Iherc is now a great need Ibr reappraisals, re-engineering and

repositioning so as to remain competitive i n the fdst changing business

, cn\/ironmcnt and s ini~~ltanco~~slv take advantage of emerging neiv marltets.

More and more emphasis is now placed on the satisfaction of thc

cons~~mer/customer as the basis for continued survival and growth in our-

highl~ competitive world. The summary therefore, is a shift of perception

towards I'OTAL QUALITY MANAGEMENT; where everything has to be

22 cloric rightly. such that thcrc: are n o provisions for mistakes or repetitions.

The absence of quality in various operational levels and aspects has forccd

many firms to cease to exist. Hence. the need to identi!'y the various

corporittc sti.ategic managcrnent stylcs i n our manufacturing companies, the

tdcn ti ficar ion of re-engineering and repositioning activities and the need to

proffcr solutions and suggestions for improvements necessitated this

rcwwcli wor-k.

For- adequate ~xvicn. this chapter has been derided into sub-sections,

2.2 COKPOIIAI'E STKA'I'EGY

2.2.1 C'ONC'I:'PTANDDEI/ELOP~VIENTOFC'ORPORATESTl<ATEGY

7 he Dc\~elopment of corporate strategic planning in business i s a post

world war 11 phenomenon. Prior to this period most business l i r m carried

on thcir husincss aS1i1i1-s without spelling out any foi-ma1 objectives or long-

~-iinge plans. Hmincqs plann~ng \vas confined to the frnctional or

departmental levels that had only short term plans, which foc~ised mainly on

n x t n ~ ~ ~ ~ c t ~ ~ r i n g production planning.

Sincc the early 1950s most tirms were confronted with gowing

variability and unpredict:tbility of thc business environment as co~npctitors

generally were growing much stronger, smaller. more creative, and having

23 more resources than ever before; business managers have become

increasingly engaged with developing rational and foresight ways of

adjustins to and exploiting environmental change. Compreliensi\ie planning

now covers long range in the livn.1 of strategic planning involving the cntire

fabric of the organization and is the concern of the top-most management

rolm whcrc i t dcsccnds to all. Hence i t i s called corporate planning (Imaga

2000: 10)

'l'hc strategic problem of a firm is the relationship between the firm

and its external environment. (AnsoSl'200 1 : 1 1). Since the middle 1970s. big

companies in higeria and other developing counties of the world haw

sti~rtcci lo dcilclop cor.po~xte strategic plans in line with their counter parts in

the highly industrialized countries where corporate strategy became a

necessary condition to biisincss success sincc the dawn of the 1060s.

2.2.2 MEANING' AND DEFlNI7ION OF CORPORA TE STRA TEGY

According Longman dictionary of English, the world

'-C'OKPORATII" is described as meaning: of belonging to, or shared by all

mcmbers ol' groirps collective, being 01- forming a single body. While

"strategy" is seen as a particular plan for winning success in a particular

activity. as in war. ganie and competition fbr personal advantage stratcg),

24

answers the question of how best a business can achieve what i t decides to

achieve. I t describes the best manner corporate objectives can be achieved.

I t in\ol\,cs the process of selecting in order of importance, the areas

demanding special attention. It is the bridge between objectives and plans. A

company may choose to concentrate on, for examples. increasing ~iiarkct

share, impro\,ing quality, best price, and superior after sales-seines. Top

priority \ b i l l bc givcn to the Ihctor critical to its market success. 111 reality.

tlie custoniers will force tlie strategy on the company if it is merely a niaskc~

Ibllower. On tlie contrary, if the company aims at capturing leadership in

!narlict share. pricc. quality. scicnce etc then it is obliged to have its own

strategy (Iniaga 200:8). 4tmf-W~ nC w. ,, ,!-,*-w a *

A n organizations strategy consists of the moves and approaches

dev~sed by managcnieiit to producc successfi~l organization performance. In

ef'1'cc.t stratcgy is ganic plan of nianagement for- the business. Strategies arc

developed by managers to guide how an organization co~iducts its business

and ho\v it will achieve its target (hjectives. When there are no strategies.

thcl-c arc no estnblislicd courses to Sollo\\!. no road maps to manitge by, no

cohcsibc action plans, to produce the desired results. 'To qualify as

cxcel luntly managed, an organization must exhibit excellent execution of'

cxccllent stratcgy. A n organization has a greater cliancc of' becoming a peal<

2 5 performer in its industry if it's better in conceiving its strategy and marc

flail Icsb i n its cxccution (Ansoff 200 1 : 17).

1 Io\vever. superior strategy-making and strategy-iruplementi~~g do not

guarantee superior organizational performance continuously. E~vcr-~ well-

managed o~gmizations can hit rough times for short periods because ol'

adversc conditions bcyond managcnient's ability to fimsec or react to.

Nevertheless, it is management's 1-esponsibility strategic def-knses and

managerial appr.oaches that can o\:ercome adversity. Indeed, the vcqr

chscncc ol'good strategy is to build :I strong and tlexiblt: position to producc

s~~cccssfiil performance despite unforeseeable and unexpected external

factors ('l'hompson and Stricltlmd 200 1 :2)

(:orporate strategy concerns a diversified con~pany's to establish

I,u\rnc:,~ pmitions in cii1'fi.r-ent industries and the action and approacl~es i t

uscs in managing its diversified businesses. However it should be noted that

corporate stratcgy and business strategy are one and the same since therc is

o11ly onc h~~sincss to l ixm a strategy b r ; thc distraction betwecn cosporatc

stratcgj and business strategy i s relevant only when diversification enters

the firm's picture. In a diversified enterprise. stratcgics are initiated at four

distinct organimtional levels, which include:

2 0

(a). ('orporate Strategy: Which is developed by the chief executive

uWiccr and oihcr Iicy cxccutivcs. Ikcisions arc typically rclicvcd a n d

approved by boards of directors. It involves building and managing a

high-peri'orniing portfolio of business units through malting

acquisitions. strcngtliening existing business positions, divesting

businesses that no longer fit into management's plans: capturing

thesynergywmong related business units and turning it into

competitive adi~antage and steering corporate resources into

busmcsses w i t h the most attractive opportunities

(b). Functional Strategies: Which are developed by filnctional managers

or departmental heads. Decisions are typically approved by business

u n i t heads. It involves cralting moves to support business strategy and

a c h w e department perii~rniancc ~b~jectives. It also intolvcs thc

unilication 01' straicgy-related movcs and approaches proposed b)

lowcl--level managers.

(c). Rusincss Strategies: Which is dcvclopcd by a gcncral managcr or

head of business crnit. Decisions are typically reviewed by a board oi'

directors. It involves devising moves and approaches to compeie

succcssli~lly and to secure a competitive advantages for the business

27 u n i t and So~.niing responses to changing external conditions by uniting

t l~c strategic initiatives of key functional departments.

(d). Operating Strategies: Which are developed by field unit-heads and

lo\;cl- level managers within functional areas. Decisions are usually

aplmncd by filnctional or c-icpartmental heads. I t in~olvcs cs;il'ting

still narrower and more specific approaches aimed at suppurt~ng

(i~nctional and business strategies and at achieving operating-unit

ol?jcctivcs ('rhu~npson and Strickland 2001 :33-35)

A firrthcr- elucidation of the concept of co~poi-ate strategy was made

by "Michael E. Porter. says that Corporate Strategy is the overall plan for a

di\ crsiticd company and conccrns the different questions:

MI hat businesses the corporation should be in and hovv the corporatt~

ol'ficu should manage thc array ol'business units'?

('orporate strategy is what makes thc corporate world add up to more

t l u n the sum of its business u n i t parts. and to survive. cornpanics must

undcrstnnd whai good corporate slrategy is;

Areas ol'('orporate Strategy highlighted, viz:

(i) . Portfolio management: .This is based primarily on divcrsilication

through acquisition. '[he corporation acquires sound, attractive

cornpanics which arc treated as autonornous units and the corporation

(ii).

25 supplies capilal and p~.oSessional management techniques. I'ortlblio

managers categori~c units by polential and rcgirlarly tr;lnsf'er

resources l'om units that generate cash to those \ ~ i t h high potential

and cash needs. In most countries, the period 01' portli)lio

management as a valid corporate strategy is over. 'The benefit or

giving business nits complete autonomy is also questionable.

Increasingly. a company's business units are inter-related, drabvn

cogether by new technology, broadening distribution channels, and

charging regulations.

Restructuring: The restruct~~ring strategy seeks out undeveloped.

sick o r threatened o rga~i i~a~ ions or inclustries on the th~-cshold of

sigiiilicant change. I'he parent intervenes. frequently changing the

unit managcment tcam. shifting strategy infusing the company with

new technology.

I'lic outcome is a strcngthencd company or a ti-ansihl-mcd

industry. Tlic parent company sells off the stronger unit once results

are clear because thc parent is no longer adding value. But the

proble~i~ is that cxoiipaniedI'ind i t hard to dispose 01' business nnils

once they are restructured and performing well.

2 0

( i i i ) . 'l'ransferring Skills: ifvery husiness units are a collection of discrete

(iv).

activities ranging from sales lo accounting that allo\%s i t to cotnpele.

This is called the value chain. At this point the t\vo types of inter-

t-clalionships crcatc syncrgy.

'I'hc. first is a company's ability to transfer skills or experlise

among similar value chains.

'I'hc seconcl is he ahilily to sliare activities c.g. sharing thc

san-~c salcs forcc or logistics network. By using both acquisitions and

internal dcvclopmenl co~~ipanies can build a transfer -01- skills

strategy.

Sharing Activities: A polent basis for corporate strategy is the ability

to sliare activities in the value chain because sharing often enhances

competitive advantage by lowering cost or raising diffet-cntiation.

1 lo\\,c\ cr, a ~mt-benefit analysis of prospective sharing ~ppot-~~~i i i t ics

c,r n show whether synergy is possi blt: or not. Following the shared

activities model requires business units collaboration and autonomy is

1ia1.mful to such collaboration (Porter 2002: 59 -- 6 5 )

With this buckground in formation on corporate strategy onc

can n~ove into the issues of re-engineering and repositioning in the

corporate world.

3 0

2.3 ORIGIN, CONCEPTS A N D MEANING OF RE-

ENGlNEERlNG

There is clearly a great debate over the origin of the KE-

lJN(;IS~:tIIING ('ONC'F,1)7'S. I,ocv\vkorich (1996:34) insists that it is a11

old conccpt because According to him, the concept has simply been

IUIII-rcctcd by tno intell igcnt p~~oli.ssors/consultants. I n his works, "I 1:~rnmer

and ('hampy (1098:IO) have repackaged old concepts and ideas. giving

them a new name'.

I la yes and Wheelwight(l999:22) argued that American

mani~f~act~~ring companies have ~xduced their comniitments to procesb

cng~nccring or process rc-engineering. they went Further to discuss thc

conccpt called "the rortuise and the Hare'' approach to in dust^-id

compctit wn.

I'hc "flare" connotes "strategic leaps'' or Business process Tie-

cngrnecring ((BPI<) while the "'Tortoise" refer to "increniental improvement

or "Total Quality Management" (TQM).

lie-cngmeering as a concept was lirst introduced into common usage

111 1 000 in a seminal I I : r \ al-d Husincss Re\ iew by Michael I lanirncr l 2 nrho

held that "It i.; time to stop paving the cow paths. Instead of embedding

outdatcd processes in silicon and software, we should obliterate thcm and

3 1 start over. We should "re-engineer" our business; use the power of modern

in t'orination technology to radiantly redesign our business proccsscs in order

to achieve dramatic improvement in their performance"

In 1003, I Iarnmcr and James Champy developed the concept further

111 a book: Kc-engineering - the corporation which produces the following

definition:

----"lic-engineering is the fundamental rethinking and re-design of busincss

processes to achieve dramatic improvement in critical, contemporary

~neasul-cs of'pt.rf'o~.inance. such as cost, quality, service and spced"

'I'hc implication of'this definition is the need to rethink l'u~ictions and

pi.occss: concentrate o n processes rather than functions as the central focl~s

for the design and management of business activity.

----"Kc-engineering comes into play when there is an action, an activity or a

systcm which is already in place and in progress: and which is now being

impro\~ed i~yori or undergoing changes to achieve enhanced performance.

----"In the tmsincss C ~ I - ~ I C . thc term I-e-engineering refers to ail ellhrts geared

tonarcib improvement ol'consumer satisfaction and may include changes in

the value systcm ot'ol-gani~ation, changes in the processes of'p~-oduction and

changes in the level, nature and type of technology employed.

32 I,

---- Ke-engineering is one of' several organization's \vide changes that Inny

occur in an organization. Others include change in mission, restructuring

operators, mergers. major collaborat~ons, total quality manageiment etc. I'he

tcrtn dcsignatcs a fundamental and radical reorientation in thc organi~ation

operat ions (McNaniara 2000: 1 )

----"Re-cnginceri~~g is u business process redesigned effort insurted to

~ I . O C I L L C C I;~sting ~~'esults as ~t ignores what is and concentrates in what sho~lld

be. I t is perhaps thc most \\,idely followed app~.oach to corporate ollangc in

~.cccnt y c ~ ~ r s as it is not about making marginal or incremental but about

achieving quantum leaps in performance. Radical designs means

disregarding all existing structures and procedures and investing completely

nc\\ and better \\ ays of' accomplishing work (Bennett 200: 1-3)

Form the foregoing, \vc can see that re-engineering is any exercisc

that i s dcsigned to impl-ovc upon the performance of an action and profitable

orgiinl/atlon or to rcsuscitatc and rejuvenate a deteriorating o~.g(znization.

In addit~on, re-engineering i s all about malting charges in thc status

quo towards the ~~nprovenlent ol'perlormanue.

Re-engineering is an aspect of' change management in organization.

Infact. during the course of data collection for this projcct \vork, an auto

s e m h on thc Intel-net for information i n re-engineering brought about

33

material i s m management of change. In other worlds, change management is

also a h n of Busi~iess Strategy: hence it is not separated form Re-

engineering.

2.3. I . I RCNNESS PROCEXY REENGINEERING IN MA NUF14 CTUR I.VG

IN13 US 7RIES

Hirsincss processes are simply a set of activities that 1ransform a set ot'

inpr~ts into a set of output (goods or services) for another person or process

using pcople iind tools. Business processes could be pictured as a set of'

triangles shown below. The purpose of this model is to define the supplier

and process inputs, a company's process. and the customer and associated

oi~tputs. Also s h o \ ~ ~ n below is the reedback loop from custuliiers.

O \ w the past 10 to 15 years companies have been forced to impro\,c

tlieir l~usiness processes because customers are demanding better and better

3 4 p ~ u d ~ ~ t s and services. Many companies began business process

iniprovenlents by re-engineering existing processes.

l-his appl-oach attcli~p[s to understand, r e d e h c ,ind lcclcsig~~ t l~c

ciirrclit p~-occsses and makc perliwmancc improvements accordingly.

B~~sincss process I-e-engineering, according to Hammer ( 1 0 0 3 : 18) is

thc frndainental rethinking and radical redesign of business processes to

bring about dramatic improvclnents in performance. 1-Is~mmer focuses on

one of the key concepts of re-engineering that is fundamental and radical.

The alternative business environment n~ethodology is continuous process

irrtpr-o\ c~ncnt. which cmphasi;/cs on small and measurable ~.elllncments to ;in

organi/atiwiqs current process and systcm.

11 is ~~orthwll i le to note that contin~~ous process improve~nent (the

l'untlamcnta l message of reengineering) derives its origin from othcr

rmnagcment strategies such as total Quality management (TQM). Human

rcsourccs i-nanagement (t-IKM), Socio-Technological systems (STS), etc.

I he S'I'S approach encompsses issues like the complcte redesign ol'work

prclccsscs :md thc piumotion of tcanw ork and empowerment (Mumford and

tkckman 1004; M/~un?ford 1005). The business reasons for making these

changes could include:

- poor financial perl'ormance

- external cornpet i t ron

- crosion of n~arliet share OR

- cmcrging marketing opportunities.

As observed, re-engineering in actual sense is not c'lownsiAng the

staff strength, restructuring, reorganization automation or adoption of new

~cchnology. I t is rather a I-c-examination and change or the five components

o f business.

stratcgy

process

8 technology

8 orpanvation

8 C U ~ ~ L I S ~

('lar~fyuig \\ 'hat BPR means is therefore an important step in helping to

~~n t l c r s t~ r~d :

- what H P K can be expected to deliwr

- the approach (s) lhat s h o ~ ~ l d be considered

- \\ hicli rncthocls arc most appropriate in particular circumstances.

More so, Sai~dler (1996:7) sees RPR as "An approach to radical 01-

transforniational change which focuses on cluestioning the need for and the

3 0 means 01. carrying out each of the many processes involved i n the

oryni~ation's task''.

Tlic essential elements or psinciples of RPR arc (Abolo, 1997: 10) and

(('oulson Tliomas. 1 9965)

I . Rctliinking the theory o r the b~~siness

a. challenging old iissumptions and discarding old rulcs which arc

n o longer. applicable

b. Breaking away from conventional wisdom and the constraints

01' orguni~ational boundaries

c. Ixtting rigid specialization give way to broad based and cross

functional competencies

d. I Jsi~ig inlimnation technology not to automate outdated

proccsscs but to I-cdesign new ones.

2. l'sternally. l 'oc~~s on-elid customers and the generation of sreatcr

v a l ~ ~ e for customers.

3 . ( i i w customers and users a single and accessible point oi' contrast

through which they ciin harness whatever resources and people are

relevant to their needs and interests.

3 7

4. Internally. focus on harnessing more of the potential of people and

applying it to those activities, which identify and deliver value to

customers.

5 Wh21t matters are that people and other resources can bc assessed and

applied when required not where are located.

6 . 1~11cour.agc Icarning and development by building creative working

environments.

7. Think and execute as rniic.11 activity as possible horizontally.

concc~itrating on tlows and processes through the organization.

Rcmovc non-value addcd activities, undertake parallel activities, and

spced up resources and development times. Businesses process re-

cngincering's chicl' tool is a blank Chanipy (1998:8) call it, ". . ... a

cr-cativc process with an uncertain outcome"

The basic steps to re-engineering according to them are:

- Define objects

- Analy~c existing proccsscs

- lnvcn t ne\\ ways to work

- l~nplemer~t the new process.

'l'hey state that the abilrty to use insight inlagination and a willingness

to cl~tlllengt. all assumptions are key to BPR. 117 practice. re-engineering lets

3 5 peoplc change the rules. Olien, they must change the rules o f the entire

busitiess. not just thosc oi'a s ~ ~ ~ a l l department or work group.

2.3.2 RPH ON THE CHANGE SPECTRUM

BPK is all about change. It is concerned with decisions of strategic

nature. Thc change specti-urn is made up of two directions in which different

forms of organizational change can be conveniently placed and analyzed. It

bares the degree 01' organizational changes s~rch as wol-lc simplification.

purpose is to give clear. picture 01' when an organizational change is qualified

Singlc Cross Sunct ionnl lotal dclivcry t;,xtcntlcd li~uclion org~nisalio~i system value chain

Adopted: Anderson Consulting, (2000) Training Presentations

39

I d r u n thc abo\.e diagram. an organizational change can only be

termed L3PR if the organization re-invents business processes and c r~ tos bcst

practices that provide a total delivery system in the organization.

2.3.3 HPR ,VIETHODOLOGY SELECTIOAr GUIDELIArES

Re-engineering methodology refers to the PI-ocedure to a successtirl

re-enginewing o fa corporation. Methodology selection guidelines are issues

lo bc born in ~nind wh~le selecting a methodology and should be a reference

point throughout the change process. There is no universally accepted

niethodology owning to the dirferences in nature, cultural, and social issues

in cvcry business organization. An organization should select a ~i~etl~odology

that its best suited for. Thus good re-engineering projects design a n d

implcmcnt solutions that:

- are CLIS~C)IIIGI-s ~ ) C L I S ~ C I

- capitali~c in best practice and learning h m others

- arc designed Sol the iii turt:

- produce significant bottom-line improvement for the business.

( I3RP Online I .earning Centre: 2002).

40

I lcrc is an excerpt of Sour models of re-engineering methodology out lined

by BPI< Onlinc Learning Centre. These models offer alterative procedures

of re-engineering a corporation.

1 . REENGINEERING METHODOLOGY 1

Ikscribc the pro.ject

Create vision, vali~e and ob.jectives

Redesign business process and tools

Evaluate concept (benefits statement)

Plan for implementing the solution

Iniplcment the redesign

'lransition lo contin~~ous process improvement (measure

resu Its)

1 1 . KKKNGINEERING METHODOLOGY 2

Delinc: the project

I)ocument as - is process (diagnose)

Iklesign business process and technology

I )evelop a cost . bencfit analysis

I'lan and implement new processes and systems

Evaluate process performance.

I l l . REENGINEERIIVG NIETHODOLOGY 3

('reate project prospeclus (define project)

I ,earn fi-om others (customers. associates, bench-marking,

technology)

(:rcate vision and design new business process model.

Develop enabling technology architecture and organizational

model.

PcrSo~.ni a gap analysis and prepare a business case lor change

(benefits and cosls).

I k l i n e process, systems and training requirements, and plan

implcme~itiitio~i.

Implement solution and measure perlbimance.

IV. KKEEN('IIN I<EKING M E'rHODOLOGY 4

Ikl ' inc prujcct and identify term

Brainstorm new processes and technologics.

Analp~e and prior~tize opportunities (benetit analysis).

Selcet best opportunity and design solution

Ilevclop and try new processes, information systems and

enabling tools.

Vlcasi~r-c results.

Jayaraman, Nataraja11 and Rangarariian~~-jan (1994:8) have identified a l'ive

( 5 ) 17iis1~ steps ~ncthodology to iniplcment BPI? as follo\~s:

lkveloping a process vision and determining process ol!jeclives.

This involves re-designing and simplifying business processes;

Ikl'inc thc proccsses to bc re-engineered

Icic~lti fying the 1'1. Ie\/eIs

Designing the prototype and implementing to create owncsship.

('u~.ried ('heryl ( 1903: I 1) categorized re-engineering into three levels

Str-camlining: Streamlining operations of'f'ers a basic. segmented

:\pproach to I-c-engineering. It cleans up but doesn't necessarily

transl'orm a proccss. IJurs~rits criticize the streanilining approach

t)ccausc it oftc~i docsn't go f.ar enough. It treats symptoms and cioes

not clxdlenge whether certain processes should exist at all. I t is much

l ilte qua1 i ty improvement processes; it m~lkes improvements b ~ ~ t

ducsn't radically changc anything. 11 is a quick f'ix.

Integrating: 'T'he most popular approach to re-engineering comes

l iw i ~roiects w1-1 ich integrate discrete business wocesses. replacine

43 them with a unified process that frequently cuts across fimctions and

dcpartmenl responsibilities.

c) 'I'ransforming: Some organizations approach re-engineering by

putting h e wholc company 011 the table. These conipanies rc-cvalualc

tlicir cnt1r.e reason for being, They are willing to gamble u completc

"cntcrpr~s~ ~rans lhrma~~on '~ .

I'ranslbrniation projectsrequire cotnplele co~nmitment from top

nianagcment. They n~ust step back from daily activities and take a fresh,

I-ad~cal look at their organi~ation's goals, skills and capabilities. They must

l x \\,~lling 10 dissect thc forces of competition and custon~ers and have thc

couragc to change everything at once.

2.4 l)Hl\~'Ih(; FOK<'b:S O F RF:KNGINE:KKIIVC; IN 1NI)US'I'RlKS

I>rivcrs or re-cnginecring ref'cr to those fxrors that have I I I L I ~ ~ . re-

engineering a management parddigm today. Industries conditions change

becausc forces are in motion to create incentives or pressures for change.

l'lic po1>111i\r hypothesis abo~lt inc1ust1-ies going through evolution of any

gro\vth pliascs 01- lil'e cyclc stages helps ccplains only industry conclit~ons

cliangc.

44 Non-adaptation o r these conditions has forced many companies out of

business and many others on the death ron. Son~c of these ror-ccs inclucic.

1 . Inti>rniation Tcclinolog~: Information technology has been n m:!joi-

impact on the e\:olittion of reengineering New I T such as electronic

mail. separate a n d p~tblic databases. application systems. fiix, radio

and coniputcr confcrencing ai-c considered to be driving forces oI'

reenginccring.

Dr. Geofkey Robinson of IBM, UK, higldighted rapid IT

inno\xtion and increasingly intensive global conipletion ;is two r m i n

reasons why oi.gaiiization have had to consider the introduction of

radical changes (Pe1tu.M. et al" 1 W6:9).

I I . (;loha1 Conipetitio~l: Advancement i n Information Technology has

niidc thc world a global village with stiff competition being the spill-

over effect. IT has made industries that are geographically dispersed

to compete as though they are in the same industrial estate. Faced

\ \ I I O S ~ I C I ) il siin~vill challenge. companies had tv evoh~c et'l'ecti\c

strategy to over coming the cut- throat competition. Redefinition and

radical redesign of' business processes have been an option 1'01.

business sill-viva1 and revival.

4 5

1 1 1 . IBrodirct Innovation: Prod~rct innovation c:in broaden an industry's

cu~tomcs base; rcjuvcnatc industry growth and widen the degrcc of

product differentiation among rival sellers. Successful new product

introductions stren@hcn a company's position. ~isi~ally at the expense

ol'co~~ipanies who stick \ \ t i t 1 1 their old products or are slow to follow

with their own versions of the new product.

IV. Marketing Innovation: When firms successfLllly introduce ncbc

\ 4 a 4 s t t o murltet thcir products, they can spark a burst or buyer

intcvcst, widen industry demand, increase product dil'ferentiation and

or lower unit costs any or all which can alter the conipetitiw

activities.

. ('llange in ('ost and Efficiency: A race for growth dominates a11

industry where large m a k t share becomes a distinct advantage that

all lirms are pressureci to adopt volume-building strategies. In such

industries. signi ticarit economics of scale emerge and strong Icarning

CLIII C' cSI'CC~S allo\cs firms \+ ith the most production experience to

under C L I ~ rivals prices. Likewise. sharply rising costs for a key input

e~tliel- l-aw materials or labor can cause a scramble to eitlier line up

rel~able suppl~es at af'lordable prices or s c ~ c h out lower cost

st~bstrt~~tes. Any timc important changes in cost or efficiency taltcs

46

place. 1i1.m'~ positions can change radically concerning bvho has. how

big a cost ndvantagc.

VI. Emerging Buyer I'references for a Differentiated Instead of a

'ornmoditv Product: 4 shift away from standardized products

o c c ~ ~ r s \\hen scllcrs are able to win a bigger and more loyal buyer

following by introducing new futures. making stylc cliangcs,

offering optio~ls and accessories, and creating image diflkrcnccs \,ia

at{\ erticing a n d packaging. The drive of change is the struggle among

r ~ ~ a l s to out-dit'f'erentiate one another. lndustrics evolve difi'erently

depending on wliether the forces in motion are acting to increase or

decrease ~ h c e~npl~asis on prodirct differentiation.

VII. Hegulatiorl Irlflucncc.~ and Govemnent Policy Changes: Another

factor that can fhrcu very sig~~iticant changes in industry practices and

strategic approaches are rcgu Iatory and govet-nment actions.

I>ur*cgiilation has been a major driving Ibl-cc in Ilic airline. banking

and lelcconlmunications induslries. In international markets. new

regulatory enactments of host governments to open up their domestic

tnarltel to foreign participation or to close off ftmigii participation to

projccl iiomcstic competition are a major fhctor in shaping industrial

competition het\hccn foreign and domestic companies.

4 7

2.5 FRINC'lPI,ES OF REENGINEERING

I-Iammer ( 1992: 10) argues that significant iniprovement requircs

breal<ing a \ \ q J licm outdated rules and assiimption. It demands ri complelc

rcth~nk~ng oi' operations i.c, ho\v an organization docs business. He also

rccommcnds that managcnicnt should organize a team, I-eprescnting the

Functional units involved in the process to be re-engineered, as well as other

11nits tha t dcpend upon thc prnceys.

Onc iniportant reason for re-engineering instead of attempting

incremental iniprovement i s the need to integrate computerized production.

infi,rlilation systems. and l iu~nm resources of an orga~iimtion. 'I'his is a n

cxpcnsi\c changc. and one that is very difticult to accomplish piece menial

through a n inc~.en~ental approach. I-Iowe\:er, seven principles guiding

reenginect-ing programmes.

1. Organizc around Outcomes, not Tasks: 'I'raditionally work has bccn

orymi/cd around cliffcrent tasks, such as typing, assembling and

, supen.ising. 'I'his tirst principle of re-engineering would, instcad of:

having one person. the person or team performing all the steps in an

idcn~ificd process. ol'the person or- team \vould be responsible {or- the

outcome of the total process.

4 8 2. I-lavc thosc \vho LISC the output of the proccss perform the

process: For example. w production department may do its own

pu~has ing , and even its own cost accounting. This principle would

rcquirc a broadcr range of cupcrtisc fi-om individual and tcaliis, and :I

greater integration of activities.

3. Subsume Information Processing Work into the real work that

produccs the Iuformation: Modern computer technology now

makes i t po\sible for L\TNI\ I ) I - O C ~ S S information slrnultaneo~~sly. Iqor

cuarnple scanners at checkout counters in grocery stoscs both process

customer purchases and update accounting and inventory records at

the SiImc timc.

4. Treat geographically Dispersed Resource as though there M ere

centralized: Hammer uses I-lcwlett-Packard as an csamplc of hen,

t h ~ s princ~ple \~orlts. 1 : r ~ I i 01' tlic company's 50 rnani~~~ctur ing units

had its UN 11 p~~c I i ;~ s ing departn~cnts. which prcvcntcd thc company

from achieving the benefits of scale discounts. Rather than centralixcl

purchasing which would have reduced responsiveness.

1 o local manuli~cturing needs, Hewlett-Pacltards introdirced a

corporate unit to coordinate purchases, so that scale disco~mts could

49

bc achieved. That way, local purchasing unit retains their

deccntralixd a~~tliority and preserve their local responsiveness.

5. 1,ink parallcl Activities instcad of h t e g r a t i ~ ~ g their results:

Sevcr-at processes are often required to produces producls and

services. 'I'oo often though, companies segregate these processes so

that thc pl-od~lct comcs together only ill the final stagc. ;vle;~~l\?ihile.

i i l c k , ~ o i ) I ~ ~ l , : , i l i ~ i ) O L L L I I i l l onc 01 I ~ I X processcs, c ~ ~ ~ d thosc psoblcrnh

111ay not become apparenl until too late, at the final step. It is better,

according to hammer to coordinate the various processes so thal such

probleill~ are avoided.

6 . Put the decision point where the work is performed a ~ ~ d build

conll-ol into the process:

'I radit~orxil buruucriits sepal-atc decision and authority Ii-om thc

17 OI-k 1 hii; pi-inriplc ht~ygcsts that t l~c people doing thc \\,orl< arc the

OIIC \vho should iiiakt: decisions about [hat work. The sales person

should have the autliorily and I-esponsibility to appruve credit, for

example. This principle saves time and allows thc organization Lo

1.cspo11d Inore clTcct~\~ely and erficiently to custorner needs.

S o n c Illatlager> worry that this principle will reduce thc~r

control o\ cr thc pl.occss. llo\\wer. control can be built into the

5 0

process. I11 the example cited, criteria for credit approval can be built

~n to 11 conip~~ter programme. so the sales person has guidance For

(:very credit dec~siun.

7. ('apture information once and at the source: ('ornp~~terircd on-

line tiatabase helps makes this principle achievable. I t is now casy to

collect inbmation when i t originates, stores it and send it to those

u ho nced it.

2.6 KEKNGINEEKING A N D CORPORATE CULTURE

l'lic main concept of corporate culturc is thc organizatiur~'~ lxlicfs

and philosophy of how its ufhirs ought to be conducted.

( 'orprate culiure is made manifest in the values and business

principles that senior managers espouse in the ethical standards they

demand, in the policies they set, in the traditions the organization maintains.

in pcoplc's attitudes and feclings and in the stories they tell. etc. 111 recent

tirncs. an organimtion cul t~~re is an important control for or obstacle to

S L I C ' C C S S ~ ' ~ ~ L ' Y C C L I ~ ~ O I I of' strategic changes. When 111ere is no synchron)~

betnecn a conipany's culture and strategy, the cult~rre has to be changed as

rapidly as possible; a sizeable and prolonged strategy-c~~lt~~re conllict

n u k c n s and ~iiay even defeat ninnxgcrial efforts to make the strategy work.

5 1 Implanting the culture-building values needed for a s~~ccessl i~l

b~~sitlcss rcenginecring cle,e~ids on u bincere and sustained commitment by

thc chict' cxccutivc coupled with extra-ordinary resilience i n rendering the

culture through both \\lord and deed. Tlicre is considerably more work to bc

done in both installing the culture and tightening the culture-strategy t i t unt i l

a big majority of the work force have joined the cu l t~~rc and shxc an

emotional coni~nitment to its basic values and beliefs. 'l'he tasks of malting

cult~rr-e to become supportive of strategy or change arc not a short term

cxcrcisc. I t takes t inic Ihr a He\\ c111ti11.e to emerge and prevail thc biggel- the

org;mi~ation and the greater the cultural shirt needed

stratcgy fit, the longer it taltes.

A strong corporate culture founded on cthica

to produce a culture-

principle and sound

\,;~Iucs IS ;I \ ,itill dr~ving Ihrce behind continued strategic success. St1~1ig

\.slues and high ethical standards nurture the corporate culture in a very

positive \\ ay , 'l'liompson and Strickland ( 1999:33)

incl ~ d e :

a. Participative change: this occurs when new knowledge is made

a\.ailablu to the group and cooperation is expected from the members.

5 2

b. L)ircctivc change: - this occurs when the change is imposed on the

total orpni/ation b y somc csternal force, such as higlicr

management. the community. new laws.

I t s h o ~ ~ l d be pointed O L I ~ here that there is no change strategy which is

bcst. Efl'cctive change agents are those who can adapt their strategies to the

demands of their ~~nicluc environment (Hersey and Rlanchard 2002: 333-

350) .

-1 he process of change has been characterized as having three basic

phaw.; \~,liich :11-c:

i i .

i i i .

I1nfl-eezing: this is the breaking down of the norms, customs and

traditions of individuals that is old ways of doing things, so that they

arc ready to accept nem ah-natives.

Changing: this is thc provision to members of the organizution with

new patterns of behavior.

Reti-ee~ing: this is the process by which newly acquired behavioul-

comes to be integrated as patterned bchaviour into the indi\,idua17s

personally.

I<cengineering psogramn~es could be equated to programmes 01'

wo~i th wllic11 may be from a highly completive position to 21 much stronger 5

I , . \ , c! ( \ I !'to111 ,\ dcplol-ahlc pwitioti to one ot'strcngth.

I here are actual implementations of reengineering activities. These

actiiritics i11-e clxsii'ied into thsec main groups, which ii~cludes;

I . ('liangcs in the production and distribution processes.

l i . ('hange in thc level and type of technology employed.

. . 1 1 1 . C'hangcs in the value syslcms

A k r studies ol'customer demands existing production processes may

I ~ Z L C ~ L O I)L rlivdliicd bo a s 11) gii c lnorc satisfiiction to thu111. 'l'l~is inwh cs

clianges in ra\\ n~aterial mixing proportions, total substitulion of raw

materials or dil'fercnt methods of psocessing. 'fhese required changes in the

production and distribution methods and are for111 of reengineering

dct~v~tics. i n order to groni and meet customer dernmds.

Reengineer~ng very often involves changes in plant designs fi-om the

uw oS obsolete technology to the inslallation and subseq~ient use of more

modern technology. \ihcn thcsc kinds of change take place in I'actories, the

oper.itio~~al cl iic~enc~es are mow often than not greatly enhanced. T'he

company hcgins to maltc gains on econon~ics of scale and n~aintena~icc

5 4

costs are drastically reduced. Moreover, the quality of the products is also

1111l~o; cd ;irid so 1s proct~tct pt-cscntntion. In csscncc. tlic recnginccring

171.in~s in niorc elricient and more acceptable means of production.

Inf'act. the succcssf~tl implementation of any business stratcgy c.g.

reengincering, requires a high degree of congruency or strategic fit between

thc strategy and the internal organizational structu~-e. Any I-ccngincering

proicct that does not Factor in the diff'icultie people hm~e with change and

addrcss the changc issites in a systeniatic and structured way, is doomed to

i l i i l ( I , ~ I I I ' I I 200 1 : I ) .

A decision to manage change by applying an organizational.

strnct~~t-cd n~ethodology is the clear choice of successf~ll companies. Whcn

this is done changes are implemented faster, cheaper and with a minimum

ol' p i n and disrilption to people. Change management is a key tictor in

rnahrng the changes from business process reengineering successf'ul.

2.8 KEE;h(;INK~:KINi; SUi'<,'b:SS FACTORS

Success factors are a collection of lcssons learned fi.om reengineering

prolucts. More than half o f carly I-ecngineering prqjccts hiled to bc

completcrd 01. did not achieve bottom-line business results, a n d for this

5 5 reason reengineering success factors have become an important area of

study tlicse includes:

1 . 'l'op management sponsorship (strong and consistent involvement).

2 . Strategies a1 ignment (with company strategic direction).

3. C'ompelling business case for change (with measurable ob-jectives).

4. p n w ~ ~ methodology (that includes a vision process)

5 . Lffccti\e change management (address culture transl'ormation),

0. Line ow~ership (pair ownership with accountability).

7. Ikengineering team composition (in both breath and knowledge).

2.8.1 TOP MA NA GEMENT SPONSORSHIP

bl/lajor business process change typically affects processes,

technology. job roles and cu l t~~rc in the workplace. Significant cliangcs to

cvcn o w 01' thesc arcas require resources, moncy and leadership. I f toy

~nanagemc~~t does not provide strong and consistent s ~ ~ p p o r t most likely onc

of tlicse ~hrec elements (moncy. 1-csou~.ces or leadership) will not be present

over thc life of the project, severely crippling a company's chances for

succcss. Without top management sponsorship, implementation el'forts can

be strongly resisted and ineffective.

Rccnginecring projcct goals should he tied back to kcy business

objectives and the over all strategic direction of the organimtion. This

liiihagc should show thc th~.cati from the top down, so each person can easily

co1111cct tl~e overall busincss direction \vi th the cony~any's demolxtrated

liun~ ~ h c pcrspecti\<e of' fiiiancial pcrfo~-mance, customer scrvice, cmploycc

ali~c, ;~nd the vision of the organization.

Without strategic alignment, your key staleholders and sponsors may

tinct ~hctnselves available to provide the level of s~~ppor t you need in terms

01'1xoney and resources especially if there are other projects more critical to

the i'~~ture ol' thc business. and morc aligned with the strategic direction.

2.8.3 U ILYI:Vt.I,T,V CASE FOR C'IfA NGE

T o p managcrnent must be ablc to conmunication the business case

tbr changc. C'over the few critical points, talk to the current state, and what

itnpact this condition has on customers, employees, and business results.

Statc the dri1;ei.s lliat are causing this condition to occur.

t:inancial pay back and real customer impact fi-om ~n;!jor changc

initiatiies arc difficult to measure and more difiicult to obtain; without a

rigorous business case both are unlikely.

I t is important to notc that the nicthodology a company selects docs

I I L I ~ ~ C I - not only should your team members understand reengineering they

should know how to go about it . In short, a company needs an approach that

M i l l iiicct the lieeds of' its projcct and one that the team understands and

h L I p p o [ 15.

2.8.5 CH,4 !VGE iI4AN.A GEiMENT

One of' the no st ~ \~cr looked obstacles to succcssli~l plqo)ect

implcmcntat ion is resistance from those whom iinplenienters believe will

benefit t l~c most. Most projects underestimate the cultural impact of major

proce4st.c; ;lnd str~~ctural change. and as a result do not achieve the f'1.111

potmtii~l of their change cffol-t.

('hange i~ianagcrnent is the discipline o S managing change as a

i>l'oceSs. \ ~ i t h d~rc consideration that employees arc peoplc not

131 o y m ~ i i a b l c 1ni.ic1i ines. I t is about leadership with open. honest and

frequent comm~~~iication.

V;~ny ~.cdcsigti tcarns (senior nianagement) respond to crisis in line

operations with external consu1t:mts or their own staff. I t is a rescue

operation because the ability of external consultants to iniplerner~t

sign~licant change in an organization is small. Every rcengineering

organization nccds both thc l inc organization to Iiavc a\varcness that they

nccd liclp. to contribute tlieir knowledge, and to own the solution and

~~~~plcnic.nl;ltioi~.

2.8.7 REENGINEERING TEAM COMYOSf T f O N

'l'he reengineering team composition s h o ~ ~ l d be a mixed bag. An

o u r line i:i gi\.cn bclo\v:

Somc mcmbcrs \\ho do not kno\v thc process at all.

Somc 1nc111be1.s that Itno\\] the process inside-out.

I ~ ~ \ ~ o l \ / c C L I ~ ~ O I I - I C I . ~ i 1' YOLI can,

Sollie mcmbers ~.cp~-esenting impactcd organization (groups).

One or two technology gurus.

1-ach pcrson put your bcst and briglitest, passionate and conimiltcd.

Some mcmbers from outside of the company.

1,acking a formal methodology, Hyatt, carol and Linda Gottlieb

(200 I 56-70) found out that many successful re-engineering projects f o l l o ~

!im- 17h;t:ic munqynient approach. 'Fhey dubbed the approach thc Four A's

and nilmcd the phases. Activate. Analyze. Annihilate and Assimilate.

2 . 9 1 ACTIL'ATE

I n thc first phase. the reengiiiee~ing project is initiated. This is the

"get organized" phase of the pro-ject. 'The objectives of this phase according

to them are to

I . g;t in ayreement that change i s needcd-create u mission

1 1 . fbnn a s iecr~i~g ta rn

. . . 111. select a psqjcct champion

I \ sclcct ;I proccss owncr

\ ' w l ( ~ a preliminary team

vi, map core processes

Since reengineering f'requently conies as a top-down activity, senior

i~ i~r~~i igcin i~l t is LISLI; I I IS / ~ L I ~ I O I I ~ the cat-ly participants. I t IS iinportant to ltccp

tllcsc 111211 I . ~ I I I ~ I I I ~ I I~CI I I I JCI .~ invol\/ed as the project progresses, but the real

00 work of the project is generally done by a team of people with skills that

cross functional areas. ,

7 lic linal activit~l of' this phase is for a reengineering team to be put

rog~thc~. xnd a:;siglcd.

2.9.2 ANALYZE

l'he second phase. analyze, moves the reengineering effort into gear.

131 this time. team members are selected and the mission is clear. This is

where tcain "gets oriented" with the specifics. The ot,jectives of this phase

arc to:

I . sclc'c t a 131-oc'css

. . 1 1 . mail down the scope

. . 1 1 1 . map out c~irrent process

I \ . c11ccIt out currcnl process

v . find brealts in thc pipeline

vi. sct goals l'or a ncw dcsign

In n lany or.yni/at~ons. thc I-wiginecring team begins the hard work

of' ~lntlcr-c;t;~ndiny the old and decignins the new. ('oncentration is the key

during the phase. The purpose of mapping out existing processes is to find

breaks o r duplications in \vorIt.

'I'hc third pllasc calls l i ~ r certainty. At this point, project teams needs

. . LC) gel cia/-! dnci 1 . 1 ~ LIP as milrly ol' the time-robbing rules and regulations

thni t1-m can. 'l'l~cy need to pdl out a blank sheet (or bring up a blank

screen) and reinvent the process as it should be. This phase involves:

it. Asking cri~zy questions, brain storming

C . Iktailing out a new process

(1. C'hecking the ncw proccss-making sure it fit's other systc~ns.

c. I3uilding a prototype and

r. , . 1 csl ing. refining and lesting.

Once a new process is identified, it must be tested. Many

rccnginccring projccts build a prototype process then test it, refine it and test

2. Y.4 ASS1MII.A TE

Assuming thc new process is just good enough during its pilot or

prototype phase, the next and final step is to assimilate it into the

organi-ration. This is the right to "get real" objectives of this phase are:

i . ('on firm t l ~ 1.csu1ts ofllic pilot phasc.

. . 1 1 , determine the needs for widespred testing

~ i i . doc~~ment the benefits

11. in.;taI\ :1n(1 implcn~cnt

\I* lool< fix on-going support (continuous improvement)

i makc it a part ol'thc ci~lture.

A1 11iis point. tlic rcenginccring project team must assess the

org~mi/,attonwl impact of the new process. Will it change jobs'! How will it

be accepted? Will 11iajor changes in staffing be required'! If an

organi/:~t~onal development or human resources professional is not alrcady

o n fbi . pnlcct. solicit the (;el-vices ol'one at this time.

Most organi7ations come up with great ideas for reengineci-ing

pcrfhrm success fill pilots and see implementation fiiil miserably becausc

t l i q d ~ d not ligurc thc hu tna~~ l:dctors of'm+jos changcs. It is important to

considcr thc litctoss now and scek prokssionitl help.

Also, it is important to estimate or going support need of the new

p rwus . Should the company lmy a new computer system? Do they nced to

hire add~ttonal stall' to wpport it? I low will integration issues with exisling

technologies and procedures be handled'?

6 3 The final phase of the reengineering effort can bring on as niuch work

as tlic 1i1.s~ threc conibincd togetlicr. It is important to keep the team together

l

and \ior.k through issues as they surface.

'Iimc changcs and condition changes. The swirl of altercd

c~rcunnstances and new events rriakes it and new events makes it an

important duty of top business mangers to continually reassess their

company's position and prospects. always checking for when i t is in time to

stecr a new course ilnd adiust the mission. The key question herc is "what

n c N di~wtions should we be moving in one to get ready for the chanb-.. JCS we

scc conling i n our bnsiness'?

I'hc tcrr~i "KI~I~OSI'I'ION IN( ;" can be described is all efforts made

by an entcsprise in osder to place it in a position to take advantage ofmarkct

opportunities. Wilh ~'ef'ercnce to the description of reenginecring as all eflbst

org:~nization is recnginctrrcd in order to ~qmi t io r i it for the act1 it. \ enient 01'

strategic objectives. 'fhis is but~ressed by a report in the Guardian

henspapcr. which said that "the reengineering exercise embarked ilpm by

64 tht. board of' Reli~ge Insurance C'on~pany Limited in a bid to reposition thc

. . c o p . . . (C ; i~a~d~an hhrch 2, 200 1 : 10).

Repositioning an enterprise is the light of elllerging developlnent

Icsscns the chances of getting caught in a poor market position or being

dcpendcnt on thc \vrong business at the wrong the. l'his is achieved

through acquisitions, mcsgcrs. integrations and forn~ation of joint venture.

Repositioning involves changes and l i e all other changes

nwnagernent concepts calls I'or two types of performance ymistick.

I inancial obiccti~ cs and Strategic objccti\~es. - -

Financial O b j e c t i g are needed because an acceptable financia

performance is critical to preserving an organization's vitality and wcl I-

bc~ng.

Stratc~ic Obiecti\~cs are nccded to provide the company with

cons~stent ~II-ection in strengthening overall business position.

I~~nancial o ~ ~ c c t i v c s typically focus on such measures as earning

yrov 111 ~ x ~ t ~ l r ' n on ir~vc'strncmt and cash Flow. Strategic objectives however.

rclatu more dircctly to a conlpany's overall competitive position and focus

on such performance ~wdstick as growing hster than the industry average

' I I I ~ 111A1tlg p i l l s i n rni~rLet share, o\wtdting key competitors an product

quality or customer services, achieving lower overall costs, improving the

65 company's public image with customers: winning stronger foothold in

intcr-national marltcts. exercising leadership in technological advanccrnents

and developing attractive growth opportunities. The existence oS such

sti.atcgic ob-jcctives ~naltes i t clearly important that management not only

strcngthcning the organization's long-tcrm business and competiti\c

position ('I'hompson iund Stricltland 2001:5.24.25). From thc discussions so

far on corporate strategy. reengineering and repositioning we can see that i t

Inas not been easy discussing the concepts independently of one another in

thc real sensc of the world, they actually cannot be separated in the course ot'

rn:lnaging an enterprise I have only niade the attempt an independent

dlwus\io~ns ['or- bettcr ~~ndel-slanding of the concepts. I t is bel~cve (hat L\ ith

this background ~-cvicw of thc sourced literature on the concepts. one can

n o w reposition oncsclf to go hilther down in probing the relationship

txtuccn corporate sti-atcgic ~.cciigineering and successf'~~l management

perli)rmance in the manufacturing industry.

2.1 1 SIJMMARY OF 'THE REVIEW OF RELATED LITERATURE

U~vc.~-iii ecoi~o~n~ic' u n \ ~ I ~ ~ I I I I I C I I I is I w y turbulent indeed imd fix this

I-cason. it behooves, thc various corporate management teams to learn and

0 0

apply tllc niodern techniques in reengineering and I-epositioning in order LO

guarantees the continued existence of their enterprise there must be serious

concerns & w t the relationship between the enterprise and its environnient

\\hicIi i b relkrxd to as strategic as variations in thc environment inc\ itably

c'licrt interml chanpes in the entcr-prise whether planned 01- unplanned.

Corporate stratcgy generally refers to the modus operandi of any

busi~iess~ which has been designed by its top managenicnt. 'This then

bcconich i t fixus and a direction to ibllocv and acts as a cohesivc bond for all

the actions of that I-71-m. Reengineering entails tlic reactivation or

rcutilization oS a firm ill other to meet new and observed challenges. I t

irsuall!; I I I V O ~ \ C ' S tlie \vImk of tlic organization and may include changes in

the L al~ic systems, changes in the manui~actui-ing and information processing

systcms and changes in the equipment technology employed. These changes

arc usually driven by exter~ial fictors and must be propcrly and adcquntely

rcspondcd to for the continued sustai~~ability and growth of the business.

I hc people factor must be given serious consideration in the implementation

of' any reengineering and repositioning progranimes in any corporate

en\ 1 1 o!i~ncnt.

Any enteqx-ise operating with a hope not becoming moribirnd and

xtually joining in the new wave of globalization is obligcd to dcvcloped

6 7 :u~t.I implement i t s own strategic rcengineering and repositioning

propanmes, This is the only way of continuing to remain in ~ L I S I I ~ C S S and

pl.oI'itd.,ly too

6 8 REFERENCES

Iniaga. L.IJ.1,. (2000) A manual of Corvorate Planning and Strate$c

13us1nc.s~ Policy, 2"" d. Khyce kerex publishers. Enugu, Nigeria.

Ansof't.. H.1 (2001) '"Toward a strategic theory of the f'irm". In

Business strategy selccted Readings edited by 1 . 1 0 Ansof'li --

I'cnguin Books I- ngland

I~iiaga. o p j t p.8

Anwr'f. op cit.

I hompson, A. and Strickland, A.J (200 1 ) Strategic Management:

conccpt and cases. 7"' cd. Richard I). lrrin line. lnc. Boston. U.S.A.

Op cit

Michael, I+,. Porter (2002) "from competitive Advantage to corporate

Ke\\ " industrial mmtgenient, May/.lune,

60 10. Hammer: 44. and champy. .I. ( 1998): Re-engineering the corporation:

,2 manifesto for Business perolution. Nicholas Breadlcy

I'nhlr~hrng I ,oridon.

I I . I laycs and Wlict.lrigh, ( 1900). Re-sroringo~11- comp~titi \c CCJSC \ c n

Y o l k John Wiley and sons.

1 2 . hlizhacl. I I . ( I O O Z ) . Rc-cngincering the corporation. a inanifcsto For

Bi~sincss 1Cevolution. 1,ondon Harper Business press.

13. I Iammcr and James champy (1 993), Re-engineering work. a

mani ksto for business evolution, new York. Warner books inc.

1 4. h l c hanlal-a (2000) "lhisic context for organizatiorml change "in tht.

intcrnct. htt~//\v~~~u~.~iia~?~ip.o~~fi!libt~an~!nig. - mnt/orgchangc.

I Herneth. JeSSrey W. (2000) " C'onstrr~ined change: uneonstraind

S I i t the ~ntc'rnct l~ttp/\\\\~w.strategy

I3iisincss.cornisti-i1tegy/983/~~i.~gc 3.

I op cit

17. Mumford, L. and Bceltman, G.J. (1994), Tools tbr chmge and

131 O ~ I c\s. A- (,oc~o-tcclinolo~~cal Approach to Busincss process KC-

i i n e r i r --- ' i Publication Cheshire.

18. Saudler. P. ( I996).Manarring change, Kogan limited, London

7 0

I Abolo, E.M ( 1 W8), "Business process Re-engineering logic and

I ondon. I .ondon

LO. C'oulson I hornas ( O ) , "strategic change and corporate

I?cstructuring general moters in thc 1080 i n hard bool<ol. busings

b t ~ x m . cdited by Ilarold -- 1:. Glass and ~nark A. I-iovde warren,

(ic-trliam lamout publisher-s, Boston. 44A, t T S A .

2 1 . Hmmer and Champy, Ibid

2 2 \~~cIc~- ion cons~ i l t i np (2000 ) '['raining presentation, lagos, Vigaria

2.3. 131'Ii (2002), " On line learning centre

24. Jayar-~xman. Natarayan and rang;uarnanjan ( 1 994). Business process

I-ecngineering, NEW Iklhi: Vlc (;raw-I-[ill publishing company

limited.

25 r i d ' ( 1993). computing strategies I'or Re-cngincering ~ O L H .

organization Roseville" prima p~~blishing.

0 I 1 \/I ct ; \ I I Business Process littenginee~.ing: Ihc

I I~lmunside l3~1siness Process Resource Centre

I,+'. , i ~ . I - ' ~ c k University l'or~~ni 4

27. O p cit

28 I h m n w lbid

7 1 t I \ \ enpson and Stricltland. Ibid

Ilerscy, p. and Blanchand, K .H. (2002) Management of

Organizational - Beliario~rr: I J tilizing I I unian Resources

q h _ edition prenticc Ilall, New Jersey.

L<,~nla~-sh, Jcallcnne (200 1 ); "l'he People sidc ol' Business

liccngincering: '1 he key wccess Element" In the Online

Ixarning C'eritre (u l~ttp:ilwww.prosci.co~i~lcI~i~~ige.htm

I ly~ t t . ( ' . (2001) . Whcn Smart people fiiil. Re-building Inerseli' fi>r

strcccss. N w Yolk: Penguin Books

33. Giiurcliarz Ne\vspnpcr, March 2, 200 1 . Journal: re-engineering csercix

upon by the board of Ref~rge Insurance Company Limited

--,-3. 01, c i i .

CHAPTER THREE

3.0 RESEARCH DESIGN A N D METHODOLOGY

3.1 RESEARCH DESIGN

, I 'hr s;t r ~ ( l \ ' \\'as ; ~ i ~ n t d a t Y ipcria NI-euw-ies PIC with rcspcct to an

appva~aal of corporate strategic I-eengineering and repositioning the metl~ods

and procedure used in carrying out this stildy are viewed in this chapter this

cliaptcr uo~tlcl also show thc design for the research and the mcans of

collecting the data. the source of the data and the techniques employed in the

;~nalysis and interpretation of the results obtained.

I'hc rcscarch work wts designed such that the I-esearchci- collects data

intc~mls ctc. in addition. data was also collected through the iss~imct. or'

questionnaires to members oi' staff of Nigeria Breweries Plc.

3.2 YOY~~1,ATION SIZE

I'he study was carried out in Nigeria Breweries Plc, 9"' Mile Corner,

I- nuyii. i 1 1% a c spccilical ly carried out amongst assistant mangers and

It1anagc.l.s in thc \w.ioi~b cicpartments. with each department headed by a

dcp,lrt~llc~iti~l managel. fhc popirli\tion s i ~ e Ior this stiidy is 35 is adding up

all the managers and assistant manager in thc various departments from

7 3 a~nongst these a sample size I'or the distribution of the questionriaires was

3.3. S ,4~ l1~I , IN~~PIIOC'F:Dl I I iEANI~SAMPI ,ESI%l i ,

'I'hc ultiinate aim of the I-esearcher in sampling is that of makmg

inference a b o ~ ~ l the whole population by studying only the samples size. A

i;l!i~plc i!: ;i group o objects selected from a population of study for the

pui-pox ol' nlaking a generalization about the population f-on1 which the

s,l~iiplc has bcw d r a ~ .

A 111athematica1 formula was employed to dete~miine the s i x of the

samplc that \ \ / i l l be a reprehensive sample. bearing in wind that lhc

pupulat~on is a large number.

A samplc survey was cal-ricd nit by the researcher and during thu

course 01' this, 32 copies of the qirestionnaires were distributed out of which

30 \\crc popcrly coniylclcd and the remaining 2 copies \?;ere not pl-opcrly

co~nplettxi. I lit. ii)rm~llar ~liat was used to determine the appropriate samplc

W I1 ere n = Sample size

N = I'opulation of sampling

e -- A Margin of error

C'hoosing ;I marg in of ( Y O and a pop~~li~tion size of 35. we tliercforc calc~~latc this:

I 1 = 3 5

1 + 35(0.05)~

l h is can bc app~mimirted to 32 and as such 32 was nsed as tlic

sample s i ~ e fbr this rescarch work.

3.4 11E:'fHOI) O F COI,I.IX'TION

' I I L I I I C ~ I U I ildoptcd i b stratified random sampling. Each

cluchtio~ltlaire was administered on key managers and assistant rna~xrgera

thil-1) -t\\o (32) questionnaiscs were administcrcd on tlic wholc and r-et~~rncd.

I hirty \wre I u n d to bc L I S ~ S L I I . ' I hc summary is shown below:

'I'ABLE 3.0 QUESTIONNAIRES DISTRIBUTED

Distribution /sales I 4 13.33

RESI'ON DENI'S

Adrninistraiion

I I I I ~ o t c : pc~umtages may not exactly add up 100.

NUMBER OF QUES'I'IONNAIRES

RETURNED 10

PERCENTAGE RESPONSE

33.33

3.5 SOURCE OF DATA

' I hc main sources of data for this research we grouped into two:

a. Primary Data

b. Secondary Data

'I'hc primary data wwc used exlensi\xly for the purpose ol'dra\\ting an

empiricill conclusion or analysis of the study so as to come up with objective

.?. 5.1 PRIMA R Y SOURCE O F DA TA

-l7Iicsc \\:ere obtained through the distribution of questionnaires, which

was dcsigned f'or management members in Nigeria Breweries Plc. in

,~dcli t~on. o t ~ i in ten iuvs \ \ w e conducted to supplement the infornia~ion

l i -o r l~ thc L ~ L I C ~ ; ~ ~ O ~ ~ I ~ ; I I I - C C . the 'tirn is to reduce the rigidity associatud \vith

designed qucstlonnaire and also in ordcr to give the respondents thc

opportunity 01' supplying those informalion they may not give in structured

~1~1cstionnai1-es.

3.5.3 Sh'C'ONDARYSOURC'E OF DATA

In itddition lo llie above source of primary data, extractions were

made Iivm ~.t:c:tvd~, :lnd pi~blic:~tions such as annual and finaliciul reports of

7 6 tile cotiqxmy. 'I'liis was conside~ul necessary to compliment data 1:rom

primary source tliel-efore. all relevant data used in this research were

obtained From both sources which assisted in evaluating tlie cooperate

-tr,ltcgic 1.c ~npincci.irlg and repositioning acti\jitics in Nigeria 12rc\\~rics Plc.

3 . I)E:SCftlP'I'lON OF QUESTIONNAIRE

'1'11e questionnaire is made up of 14 simple and straight fonvard

questions and it was distributed to the selected population under study. Each

~-ccpondctit i s cspuctcd to mark "X7' wlicre appropriate or fill in the blariL

spaces. I t contains questions tliat are directly related to the hypothesis for its

testing and other questions to bc used in tlie sumnary and ~.econiriiendations.

3.7 SCOPE OF THE: STUDY

'l'lie scope of this study is defined by the nature of the various

changes [ha[ have taken place in the value system generally. Also, some of

tlic clia~iyc th;it ha\ c tnltcn place with respect to the bevcragc ~ n r ~ n ~ ~ ~ i c t u r i ~ i g

processes towards quality improvement would be considered.

In x l d ~ t ~ o n , changcs In t l~c level of technology employeci, that is

acquisition o f modern and auton~ated plants and machinery for increased

product~on capacity.

7 7 \4orco\~1-. other changes in the distlibution system and steps taken to

Inlprcn c tlic daily ~nanagc~ncnt or the business.

Nigerian Rt-weries Plc, Enugu was m p i r e d from the defunct

d~amoncl Hrweries limited in 1993. As such, the brewcry can still bc

~cgardcci 11s bc~ng in thc carly stage. However. because i t is p:i~-t of a larger

organhtion or' Nigerian Brewcries Plc which was four other bre\veries in

I.asos. Aha. Kacluna and Ibadan. all four breweries much older and mnrc

wph~sticated 11 becomes important to fhcus more on this brewery in l31ugu

lo stud! thc changc that arc pr-esentlv taking place especially in the light ol'

its acquisition. I t is also important to note that it is the only brewery imongst

thc five breweries owrlecl by the larger organization. that %/as not directly

built by Nigcria Bre\veries Plc but acquired as an establish brenlery.

7 8 REFERENCES

13abbic 11. Ihr-I; ( 1 073), Surc cy Rcscarch Methods. Belmot C'alifornia~

Ward sworth Publishing ('onipany. Inc.. P.94.

l o i (1088) Statistics Sol- Economics Accounting i~nd

Business studies l,ondon: Longnian Publishers. P. 128

I ~ I ~ U C C . LV. 7 uch ( I C)73). ('otducting Educational Research New Yol-I<.

Bruce 1liir~0~11.t braces Y avamovich Inc.,Ps. 247-249

1.rcd.N. Kerlinger, (1973), Foundations of Behaviou~-a1 Holk,

Reinhaal-t And Winston, lnc., P. 180

ibid

1;rc~1tl, 1 . F ilnd Williams. 1 3 . 0 . Modern Business statistics 2"" cd

Massachusetts: Pitman Publishing P. 250.

I l<eqpu7 K. L, ( 108 1 ), Groundcvork of liesearch Methods and

I'roccdurcs I~! npublished I.,ecturc notes, I!N F:CI.

CHAPTER FOUR

4.0 PIIESICNTATION, ANALYSIS, AND lNTERPKETArTIOR O F

I'H b: UA'L'A

1 h ~ s chapter ii~cuses on the presentation and analysis of data

c.ollccted. Principle. Kigcr-ia H~.e\vcric=s PIC was used 21s the study area.

IIel-e. we are concerned with the primary data collected, as it will be

used to lincl a solution to the liypotheses. All the questions raised in thc

quc\tiot~ndir c were u~liAy~cd and the result presented.

'I'hit-11-t\vo (33) copies of the qwhonnail-t. \vere administer-cd n n the

nlanrigcrs 'lnct ass~stant manugers in thc various departments which arc being

hc~idcd by ;I dcpartnlcntal nianager. I'liirty copies were properly answered

and 1.ctiiri1cd and 2 copics ~ ~ c r c not properly completed. The analysis of

these respondents was cat-rid out by finding the percentage distributed to all

~-eqwctivc responses on the clucstionnaire items the data was presented using

h:tr c.har.tc, m d the testing of the hypotheses was done using the chi-square

~nc~thod

80

4.2 RESPONSES TO THE ADMINISTERED QUF:STIONNAIRE

Do you agree that thc decisions and polices made by top manage~nent

concernin3 conipctition and gain of ma tk t shase indicate that tlie company

practices excellent strategic reengineering and repositioning'?

- 1 - .. - . - . _ I _ -. Soizrcc~: A rctii om Srr rvey 2005

I 1 Respondents 1<fspurlses 1 -- -- -- - -- - . 1

I ~ i w ~ i table 4.1. it and be observed be observed that 27 respondents

I I Numbers

/ . -_ - . - -. - - - - - - -

I Yes i 27

indicated "Yes" to questionnaire item 1 only I I-esponds indicated "No" and

2 ottlcss lia\'c "No idea". It is orien said that Wigeria Breweries I'lc is the

I

l'ercelltage I lkgree 1

leading hcvcragc manuFactu~~ir~g company in Nigeria and has remained at

90

that position I'ot u long time deposited onslaughts from highly rated

3F--4

eon~pctitors. 'The above results have followed tlie pattem of the geiieral

-. - Yes No No idea

Bar- ('hart showing responses to Question I

- 7

Ilie main focus of the company's operations is the ultimate

satisfaction of the customers, do you agree?

/ Yes I 29 I 96.67 I 348"

- - - t--- 2 o idea I 3.33

Ft.orii tablc 4.2 i t i s seen that amongst the 30 respondents. 20 of them

~ncl~catccl ~111 ~~l'li~miatlon to question 2. hone ol' them said "No" and onc

8 2 respondent indicated that he does not know. This is an i~~dication that the

provision of'superios consumer satisfaction.

Yes No No idea

Ear C'hart showing responses to Question 2

Question 3

b u s ~ ~ l c s s and always has plans for year ahead. do you agree'!

7 - - - - - - - - - 7 - -. -- 1 I

I Respondents

I<cs~""'\cs L - - - --

I 1 Numbers - I-- percentage Degree

+ - - -- . . - .. --

1 No ; . . . - - - . -- - - , Yo I ~ L Y I 4 13.33

~. 1~ .

/ Total I 30 100% 360"

Source.: Allthor's Field Survey, 2005.

83 ,Zn cx,mination of tablc 4.3 \\iould reveal that 24 of the respondents

i n r . i i c ' ; ) ! c d b L Y ~ ~ ' ' to f J ~ 1 ~ 4 1 1 0 1 1 qurnbcr 3.2 I-espondcnts indicated \ow while

llic other- 4 indicateti that they d o not know. 'TI i is outcome is a contirniation

01' ~ h c . c\tictcncc of long-rangc strategic plans for tlic continued si~rvival of'

. .

Bar C'hart showing responses to Question 3 Yes No No idea

I licrc have bcen scrious concern and progress on pl-odi~ct quality

- . - . -. -. - - -

1 I Rcsponscs E-- Respondents Number i

IJercentage %, Degree 1

1 Yes + 28 03.33 -. - -- - . . -. -- - - -

33-T--1 --I 1 N O 2 6.67 24'

1 ....-........-. - .....-..-- - -- . .- I

1 'io idca 0 0 0" .... .... . . . . , .- -

---I i '1'0ti1l 1 30 1 OOO!)

-- --

3600 1 ........................ - -

Soitrce: A rrthor 's Sirr l ) q , 6005.

84

A close look at !able 4.4 shows that 28 respondents said "Yes" t o

qucstion 4.2 rcsponclents said 'No' and none slid no idea. 'l'his result is also

in line nit11 thc aim ol' the company lo market high quality brands as

indicated in its mission statement.

Yes No No idea

t;ig 4.4 Fhu Chart showing responses to question 4

Question 5

I'lic company I~as making in~provcments i n the productive capacity in

!c~-lns ol' thc acquisition ol' modern equipment, so as to meet increasing

8 5 I I-orn table 4.5. \ ~ c see tha t all the respondents in dictated 'YES. T O

Qucstion 5 . 'The company has act~lally increased storage capacities by

installing new beverage tasks, installed automated bottling line in some of

tlic brcwcrics inlprm ed the provision of utilities and computerized many

I'he

Question 6

'There have bcen \x-iations from time to tinic in the product brand

purl ~ u i ~ o ol thc company over the years. do you agrce'?

I - - -

1 r- Respondents - - --_ __C___ i Rcsponscs ' 1 iVurnbers-T Percentage Degree -1 1

I ... - - - -- - L I I

Source: A utlr or's Field Scrrvey 200.5

8 0

Ii~-o1ii table 4.6 we see that 28 of the respondents iridicated 'Yes 10

question 6. One respondent said 'No' and the last one "Ko idea". A study of

the 1.listol-v of t h e compmy indicates that the company has been making

t imc ly changes in thc I~~-ands in its stable. Members of' such brands arc not i l l

production a n y more the company has been shifting in and not of soft drinks

production.

30 7 28

Fig 4.0

Yes No No idea

Bar C'11al-t showing responses to Question 6

Qucstioil 7

I 1 1 i PIC i s amongst the top three be\cr;lge

nwn~i i i \ c . l11 vinp companies in tcrms o T staff i.eniuneration and incentives, do

you :\grceC!

i- -- -. - - . -- - . .- - -- - - - - - - - --

Respondents I I

;\ looh at iablc 4.7 shows that 25 out of the 30 respondents 111ar-Iced

Rc\ponses.

'Yes' to Question 7. 5 respondents marked 'No' and nobody ~narked "No

Nu~nbers Percentage 1 Degree

idea". 'l'his is in

I I I

~ 1 1 1 1 ~ ~ ~ i t h il i n d ~ l y held opinion that Nigeria BI-ewerics Plc is amongst thc

Ixst ;inti Iliyllcsi paying nianul~xturiii companies in Nigeria as a whole.

ync &I "'0 idea

I'ig 4.7 13ar ('hart showing responses to question 7.

Ouestion 8

I Iow would you rate efkcts of the overall corporate strategy on the

: ~ m d r-cc!r~ction ol'cost ol'operation in the business'?

I-!-om table 4.8. one can see that 5 respondents market "Ewellenl" lo

Oueslion 8. 20 I-csponctents' marked 'Very Good' 3 respondents said 'Good'

and 2 respondents indicated satisfhctory. None of the respondents li~arlted

pool'. I.or somc lime nun, a common sing-song in the company has been

'cost cutting' a n d 111e above results act~~ally buttress this fact. I t also means

that IhC s t ~ x t c p has bt 'w lixitful to the coinpany.

Excellent V.Good Good Satisfactory Poor

t*.iil 4.8 Rat- ('hart Slio\ving responses to Question 8

I I O N would you rate thc effects o f the over all corporate strategy on

tlic total linancial pcl-fot+mancc of t h c business?

i - - - - ---- I

1 Responses Number -r Percentage Degree

I --- 1 -- I 1 Total 30 1 loo0!, j-

360'

9 0

1't-oni I'able 4.9 we find that 3 respondents representing 10%) of the

73.33'!4 o f the sample marlccd 'Vcry Good'. Another 5 respondents

representing 16.07% marked 'Good' none of the respondents marked

,arisii\ctory 01- poor. This implics that there is general agreement to the

rompany h a w had appreciable and positive effccts on the financial

perthrmance of the busincss. 'This is i n line with past recolds ol'the financial

I-eports ol'the company

Excclicnt '21.kZood Good Satisfactory Poor

!.is 4.0 h i - chart s l i o ~ ~ i ~ ~ g responses to question 9.

Question 10

l h e niarket share of the company has been increasing over the yems,

d o ) 011 q - ~ c ' )

.' -- ~ -- - Respondents I

From table 4.10 one observes tliat 26 respondents agreed tliat the

conlp;mq nlarl\ct shares have bccn incscasiiig over thc ycars and only onc

person slid "No'. rneanwliile 3 respondents indicated that they do not Itnow.

I'tic high pcrcentagc of agreement is an indication that the company has

actl~ally been having niurltet share growth in line with investments on

0 2 4.3 'I'I;,S'I'ING 0 1 ; HY I'O'L'H ESES

Wc shall classify the response into three broad departments viz;

prod~~ct~on. Administration and Distribution / sales tbr the questions selectcd

t1;r the icsting ol'thc hypothcscs. The tool of analysis is thc ('hi-Squarc X ?

111etl1od. h e Ibt-mula ol'wliich is

Y- L, Sign 01' Summation

Operative assumption includes a level of Signit'icance in percentage.

\ate also that

clf = ( R 1 ) ((' I )

Whesc df - Degree of freedom

F - Expccted Frequency - -- 'I'R X I'C' 'I'G

',\ I I c 1.c I 11 l<o\\ i-okil

I>(> C'o I unw Tots I

T =. Grand Total

I hc crrtcrio~l {'or accepting 01- rejecting the null hypothesis (140) is:

!\cccpl I if X' 5 P

Reject I-lo if 2 11

Wlw-e X' = the calculated value of C'hi-Square

L I -- '1'11~ critical v a l ~ ~ c of Chi-Square.

'I'hc critical valilc is obtained by looking up the corscsponding valuc

at the column of the iissumed level of significance and row of the degree of

irccclo~n. in t l~c ( ' l l i - S q ~ ~ i \ ~ - ~ distribution table.

H Y YO'I'HKSIS I

I I ( , . 1l1c1-c IS a I-clat~onsliip bctween ultimatc consumcr satisfaction and

protitab~irty.

I I , : -1 IIL'I-c IS no I-elationship between ultin~ate consumer satisf'action and

profitab~iity.

In ol-dcr to lest this hypothesis we shall use questionnaire item 2. i.e.

tahlc 4.2

Productio~l

h n idea I I

I >cg~-cc. oi' l'recdom = ( 3 - I ) (3 - 1 )

1 Yes 1 16 (15.47) 9 (9.67) 4 (3.87) 1

1 I

Admin

/ Total I

0 (0.53)

16 10

Distribution/sales Total 1

1 (0 .33) 0 (0.13) 1 I

\ Rejection region

('omputation of Chi-square X'

Decision: Since 2.12 thc calc~rlated value of X' is les than 9.488 thc critical

value. We accept h e null hypothesis and rqject the dhxnative hypothesis.

0 6 Therefore. the researcher concl~~des that the probability or the company is

lxlated to the ult~matt' satisf'action of the consumers.

Regular impro\:ements in prod~~ctive and technological capacity is

rel:lted to continuo's b~~siness success.

I<;gular impro~cn~cnts in productive and technological capacity i s

not rclated to continuo's business success.

I11 o~-der to test this hypothesis we shall use questionnaire item 5. i.c.

--

'Vo ( 6 ; ; " : ~ I

- - - - - - - - -- - - --

0 LO) -

I ides

- - - - 0

- - -

0

9 8 Decision:

Sincc 0 ( ~ c r o ) the cillculated value of X' is less than 9.488 the critical vitl~~e.

Wc accept the nul l hypothesis and rc-ject the alternative hypothesis.

'i'lic!.cliwc. tlic rcscal-clicr concludes that Regular improvements i n

p~mhlc t~ \ c and tcchnologicd capacity is rehted to continuo's business

SLICCCSS.

HYPOTHESIS 111

I : (ii'o~vth in company market shares influences profitability levels.

1-1 : (;scwth in company mar-ket shares does not influence profitability

In o~.dc~. to test this hypothesis we sliall use questionnaire item 10. i.e

Contingency Table I I

l L b G t - - m o d u ~ t i o n 1 Admin 1 Distribution/sales / Total

I..cvel of significance = 5?4

<'omput;ltion of Chi-Square x2

1)ccision:

Sincc 0 (;.en,) tlic calculntcd value O F X ? is less than 0.488 the c r i~ icd wlue.

\\'c acccpl the null hypotl~esis and eject the alternative hypotl~esis.

I~liercSore. thc resea~dier concludes that Regular improvements in

proclr~ctivt) and technological capacity is related to continuo's business

SLICCCSS.

CHAPTER FIVE

5.0 SURIIMARY, REC"OMMEND4TIONS AND C'ONCLUSION

5.1 SlliVlMARY OF FINDINGS

T l ~ c research ~ ' o r k aimed at the evaluation o r the programnies of

~ . c e ~ ~ g i n c e ~ . i ~ ~ g arid repositioning in the managemetit of a manufacturing

conipanq in o r d c ~ to ascertain {he long term implications of their ei'fectiirc

implcnicntation to the hsiness performance and hence highlight

it;~j~ctli~::~i:t.~ t ( ; :,~~ct;;i:~ahlc gro\\lth ;;nd d c ~ elopment in the manulixturing

scctor. As such. thc design of thc questionnaire captured the c l ix~ le r i s t i c

and meabures of corporate strategic I-cengineering and repositioning. as well

as some of the likely consequences of their application, to perSormancc. 7'hc

findlnss of' this research \\ ork u i th respect to the problems that initiated i t

( a ) I h a t any ~iianulilcturing company with a to remain in business under

the uncertain business environment is obliged to go into rc-

cnynecslng and repositioning activities. One major aspect of this, is

to ensure tha t thc ultimate satisfxtion of the consuniers/ci~sto~ne~-s.

strategic long-range progranmes arc \ esy vital ror

inability. An cr~tet-prise managed ordinarily \vould have only

-range operational plans and the sole concern \vould be

1 02 generation of profit with no regard either to how this is achieved or

1hc feeling of C O I I S L I M ~ ~ S of the products. Such an enterprise would

also not li~lly exploit its growth opportunities becwse i t woultl n o t

tiiSfi.~.c~-~t !ii:inncr that is nithiti it is cupacitics. On thc contrary, an

cntcrprisc that i s into corporate strategic reengineering and

r-cpositioning would have police concerning competition and gain ol'

t l ~ i l ~ . l \ ~ t sharc. Such a company would aim at the satidaction ol' the

thc product and ulti~liately become brand loyalists. In so doing. the

~!i!c~.prisc can romatn in business and consequently clcvclop long-

ranyc strategic plaris for optimal evploitation of gro\x?h oppo~l~~nit ies .

(b) Tlic ~.ccngincering and repositioning entails being able to identify new

tnarltets and increases in demand o f a company's products. In order to

nicct up with increasing demand and also not to bc lcft behind in thc

:~lic1iic 01 ' things. duc to continues adhe]-cncc to outdated

technologies. the company has to acquire more efficient and modern

~qttipmcnt SO to boost its producti \~ capacity. h4oreot'cr this can

imprnve the qualitv of the products and place the company in ;I

101 position to embrace producl ciifkrenliations and reformulations for

1.1 11-t I?!:!- g!-oTi t 11

(c) 7 hat [he measure of corporate strategic reengineering and

repositioning produce positive effects on the business performalms

ol'companres such as growth i n market shares. higher profits. Higher

i 'til~c:, o f s l ~ c pi iccs, ~ d u c c d costs and better motivated workers.

Although. a busincss ~ . u n ordinarily can make prolits. this would ~ L I I - n

( iLi1 lo bc '11 thc dissatisli~ctio~~ of both workers and customers.

Mortwvcxr ilirrc) \\wr~ld he hi jh cost of production and the company

noulct not hesitate to pass this on to the consumers. All thesc factors

\vouId affect thc sustainability of the business.

5.2 AREAS FOR FURTHER STl lDY

1)~1ring thc course ol' conducting this rescar-ch, the research came

i~c.i.oss topics and arcas that w o ~ ~ l d necd further expositions. In li~ic w it11

thcsc. thcrc searcher ~vishes to make recommendations I-or f~~l-ther research

work to be done on the following areas:

(i). ('hangc 511;~nq.ymc~lt: 'This n ~ u l d dwell more on how the people

ISSLIC should be best l~andled cl hen change are being implemented in

orpnimtions.

104

(ii) CornpcWion: concert? tiw this u m l d make cornpanics to tlikc actions

likc rcengineering and repositioning.

(iii). Market share Growth: This is about sustainable developn~ent and

(hr). ' i 'hc usc of ('oilsultants really nceds more study work, as owners of'

k~~sincss usually tcnd to procrastinate on the need and rclatcd cxpcnsc

for outside business advice. I t is belie~~ed that good consultant can

d c t c c ~ carly \earning signs of business failure or regression. This is

achieved through complacency check-ups on the business.

(v). Strategy and Ethics Management is also an aspect for furtlier

rcscarch \ L O I . ~ \ , as t h l h could bc vicwed as the basis for any posit~on

( i c ~ c lomwn~.

5.3 ('ONC'LUSION

('urporate strategic reengineering and repositioning has turned out, in

;lII its ramifications. to be a modern approach to business success. Their

characters such as appraisal of competitive forces, gain ol' market share.

c.ilc;tome~- empathy. long-rangc p l ; ~ n n i n g etc. an idea. \vhich have been

applicd by ~m~lny st~ccesslirl hrms in the recent past. With 0111- fast changing

economic landscape. Any I i ~ m i in which include scrious concerns for

105

~~ic ; \ su~-cs 01' e \ aluatiotl oi' these issue which include serioils concesns l'or

product qual~ty mamtenance and possible improvement. better sorvicc

dcliverv. up-to-date technologv and technological processes and product

t l~ I '~ .~~~-c~n~r ;~~ron . r-chrm~rl;~tion a n d repackaging. is most likely to be left

bch ind i n the devclopnental race and shsequentl y fkce extinction.

The results of this resuarch work have shown this r ~ ~ u c h , that there are

substantial and very obvious differences between the perl-ormances of firms.

?\ h i r h are into the practice of corporate strategic reengineering and

I - c p o s i t i o n i n g anti a!, against those that are not. This ho\wve~- docs not

suggest 21 magical, guasantecd and absolute si~ccessfi~l result sequel to thc

I I I ~ ) I L I I I L I I I L ~ I I O I I o I ' L ~ I C ~ L . ( l l ~ i i l O ( i h . i his I S bccilusc sonwtir~~c certain factor or

c\ c~its which arc una\~oidable or beyond the control of a monument team

may arise. Nevertheless. such events would Imvc much reduced effects on

tirnlc \vIi~ch practice corporate strategic rcengineering.

'l'hc csscncc (11- objective o f this practice is to build a stuongcr

competltvu position for the c13tc1-prise in thc long term. A conpiny passes

up opportunities to strengthen its long-term competitive position opting

I l l h ~ ~ r t d [ O I I I I I ~ I ~ C C ~ I ~ L I C iilil11 ovc~~icnt 111 11s markets. and i~npairi~ig its ability

to htave off' nwkct chalicnges form ambitious rivals. One need look no

f~~rther than the long-range strategic efforts of Japanese to gain market

1 00

ground on their n~or-t: podit-centred American and European rivals to

appreciate the pitfall of letting short-term financial objectives dominate the

slralegic ob jeclives ol' building a sustainitble competitive position.

C'ot.poralc strategic recngineering and reposi~ioning has bccn a very

interesting area for ~tseal-ch. It is strongly believed that fin-ther I-esearch

\vork into the I-ecommended areas would reveal more insights to milnilgel', as

I00 grourid on their more po1.13-centred American and Furopean rivals to

appreciate the pitfall of letting short-term financial objectives dominate thc

sl~alcgic obeclives oC building a sustainable competitive position.

('ot-poratc strategic reenginecsing and I-epositioning has bcen a jfcry

intevcsting area for research. I t i s strongly believed that f~wther research

\vorli into the recommended areas would reveal more insights to manager. as

\I,(> corilrn~~r in ~ I I I - qtrcct to marter and keep pace ~ v i t l i thc Iwleidoscopir

BIBLIOGRAPHY

I . !I nsofll M. I : Busincss Strategy: Selected Readings Penguin Books,

England. 1969

7 -. I $ I . C C I I . L.1 .I,: 1 lic 1'1.111~1t~les ;\lid I'ractice o r Management Longman,

I o11tio11 1075

3 . Ilcr-scy, P, and Blanchar-d. I< H: Managemen1 of Organizational

Bchaviour: Utilizing Human Rcsources sth edition prentice Hall.

Y ( ~ 3 I c r ~ w y . 1988

4. I k irne. Ohat-o. 50 Years 01' Brcwing Excellence: History of Nigerim

121-c\veries PLX'. 1946 - - 1996 Mta Reproductions I,td. London.

1 000

7

3 . Irnq,a7 F,.I!.l<: A Manual 01' ('o~posate Plannina and Strategic

B ~ ~ s ~ n c s s Policy - 2"" Edition Iihyce Kerex Publishers. Lnugu.

2000.

0. Sauch. L.K: Strategic Management and Business Policy 3'" Edition

\/lcGraw I l i l l .Ne~~~Your l~ . I988 .

7 . M/lanhlield. I-?.: t-rontiers of blanarelnent Koutlcdge, 1-ondon. l98O.

X Vi11..\. T.(;: "St~xtegic ( ' h a n g and Cot-porate Rcstsucturing: General

Llotors in ~ h c 1980s" In Handbook of Business Strategy;

1 08 I90 1 i1002 Year Rook Edition by Harold E. Glass and mark A -

llo\.de. Warren. Gorham 01r Lamont Publishers. Boston. M,4.

0 . Porter. M. F,.: "From C'ompctitiire Advantage to Corpr-ate Strategy".

In fhe State of Strategy: A Harvard Business Revien.

I ' ~ ~ ~ - h a c k . Wa~wrd Business School Publishing Div ision. Bostoc~. --

I09 I .

10. Thompson. A . and Strickland. A J.: Strategic M a n ~ e n ~ e n t : Concepts

and Cases 7"' Fdition Richard D. I w i n Inc. Boston. 1993 --

i i . 4 I . K 5 . . . l i lc Mal-Itcling Factor" In C'orporate (;ro\vtl~

5tmt cgics Eclitctl by Isay Stremp. American Manageilicnt

Association Inc, L1.S.A 1970. JOURNALS

Impwts \\,ithout a Fight" 'l'he Guardian, January 2 I . 2000

13. .4nnual Report and Accoimts 1999 Nigerian Breweries PI.,(?.

14. Business Guardian Rcport: ' 'Ref~~ge Reaps Rcnelits of

Ibxng~nwring'" 'Ilic G~~ardian Marc11 2. 200 1 .

15. I + C I . C O I ~ W L I . .I:"N17'EL Repositions for Competition" The Ciuardia~l

1 00

I0 IG~yvdc. I I . 0. S.: " l l>~v / \ PI ,C Reengineering ror- Sustainable

Grab th and Stability'' 'Thc Guardian April 5. 2001

17. Odinlegwu. F.B.O.: "From the Managing DirectorIChief Executive

Officcr" In Nibrew News October -- December. 2000

1 S. Ol'ficial Ucsk Diary 2001 ‘‘Nigeria Breweries PLC - A I'sofile"

19. O N l , INE/IRTERNET ARTICLES

20. I k n n c t t . . I . . "('onstrained C'liange: Unconstrained Results"

j ~ l h t t ~ ~ : i h \\ \\ . St rakgy Busine~s.com/st rategyl98303lpagc

3 .h tml

2 1 1 a Marsh. .I.: "The people side of Business Reengineering The key

~ ; L l ~ c ~ l . , c Elcnlenl". 111 tlie J3~1sincss Proccss Reengincuing Online

I ,earning Centre (u)http://www.prosci.com/chan~e.ht~~ 200 1 .

1 1 0

QUESTIONNAIRE

Department of management

University of Nigeria

Enugu canipus

E ~ L I ~ L I .

May 21: 2001

I a m a Master of Business Administration student of the Department

o~ 'V;~n:~ocmcnt . - I n i \ws i ty oYNigcritl. Fnugu Campus.

\ OLI h i l \ ' ~ been sel~ctecl as a respondent to this questionnaire sur\,ey.

Which i s bascd on a study of Corporate Strategic Recngineering and

Repositioning in the Mnnufkcturing Industry and Nigeria Breweries PI,C is

L'OUI- sincere opinion is requested. You i1l.e ~ ~ I s o ; I S S L I ~ L ' ~ that thc

inli)rrnation you c will be treated in utmost confidence. Please.

endeavour to all the questions.

i hank you fi)r your ill1 questions.

Yours Fa~thfillly,

OKPAIJI,,4, O N Y I N Y E IV.U

1 1 1

Sote: Please. you are required to inark 'X ' in the box corresponding to the

chosen option.

(il) .M;l i~ (b) Female 0 2. Age

( b ) 3 I to 35 years 0 ?--7

(c) 36 to 40 years LA

3. I lo\\ Ion: ha\*e vou been in the company's employment

(a ) 1 3 c 1 o ~ 5 years 0 (b) 5 years to I0 years

0

( c ) I 1 y ~ ; l ~ . ~ to 1 5 years n (d) 10 y c m lo 20 years 0 (e) 2 1 ycars and above rn

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . department.

1 . Do you agree that the decisions and policies niade by top

~ni~naycmen t concerning co~npetition and gain of market share

~n!lrcatc that the company practices cxcellcnt strategic rccnginecring

and repositioning'?

(a) Ycs I ] (b) No I I (c) Don't known 1 1 2 . 'l'he main l i ~ ~ r s of the company's operations is the ultimate satisIi~ction

o I' rhc consunicrs: d o you agree'!

(:I) Ycs // (b) No r\ (c) Don't known n u 3 . ' lhe top managcnxni places great emphasis on the future of the

busincss and ill\+.i~y~ h i l ~ plants for ycars ahead, d o you agree

4. The have been serious concern and progress on product quality

maintenance and improvements over the years. do you agree'?

rn ( a ) Ycs (h) No U (4 Don't known a

5 -, . 'l 'he company has been making improvements in its productive

capacity in terms of the acq~risition of modern equipnicnt, so as to

meet increasing demands. do you agree'?

0 . 'I'liere Iiave been \ariations Srom time in the product brand portfolio

of the company over the years, do you agree'?

(a ) Yes r j (b) No (c) Don't known

113

7. Nigerian Breweries Plc is amongst the top three beverage

manufacturing companies in t c~-n~s of staff rcmuncration and

inccnticcs. do you agree'?

; ) Yes Ij (b) s o I/ (c) Don't known r l 8. I lob would you rate the eff'ects of the o\erall corporate strategy on

the actual reduction of cost of operation in the business'!

( a ) 1:xceIicnt 0

(d) Satisfactory O

. I Ion \ ~ o u l d you raw thc effccts pf thc ovcrall corporate strategy on

thc total financial performance of the business?

(21) Excellent r - 7

(e) Poor

10. 'Tlic. market shares of the company have been increasing over the

years. do yo11 agrcc?

(a) Ycs '7 (b) o 1 (c) Don'l known 1