MANAGEMENT PROBLEMS OF PUBLIC ENTERPRISES
CHAPTER ONE
INTRODUCTION
1.1 Background to Study
In any developing economy, the government is the main initiator and promoter of economic development, especially in Nigeria. In developing countries, governments usually intervene in some areas of the economy in which the private sector cannot perform, according to Abubalar (1986) in order to facilitate the federal government has instituted and made use of many public enterprises over the years.
It would be recalled however that in the fifties and sixties, agriculture was the main stay of the Nigeria economy. The early seventies earned for Nigeria large cnude oil revenue at a level that never was anticipated. This new dimension got government involved more with widely diversified investments in areas that span both the traditional public sector and exclusive private sector business.
As a result of this development in crude oil, agriculture that was the main stay of our economy was later given less attention. Owing to this circumstance, government investments were sponsored mostly by the oil revenues. The oil boom era (1974-1979) has been described as the golden era for public investment. The government invested in over 30 parastatals and companies within this period. Most of them have been unprofitable, some cannot even meet their operating costs and have depended on government subventions for their year to year survival.
Public co-operations in Nigeria have been considered inefficient and wistful. This is because they have viewed it with the profit criterion. Kindleberger (1986) however Hints that this is not a fair judgment, economic activities, it is usually not appropriate to use the performance standard of the private sector “they are hoses of different colours, the objective of private business is profit, while the government enterprises is seines to the society or promotion of general welfare”.
Olisa (1985) opines that prior to independence and after Nigeria was faced with the problem of attaining her social-economic objectives, there was no well destined capitalist class that could operate the much needed development through their productive and industrializing activities. The civil services at that time was inappropriate for accelerated development and the country was saddened with the problem of running many business.
These parastatals are established out side the civil services and this allows for greater freedom of action, quicker decision making which will promote their efficiency and effectiveness. These corporations are managed through government appointed officials who could utilize the profits accruing from their operations in catering for the public interest (onwudunmi:1970).
(ugwu:1990) said that in Nigeria, it is very unfortunate that government have rapid development and this is because the management of these enterprises have constituted the bane of these enterprises. Most of them failed to meet people’s expectations in terms of provision of goods and services and development in general. The commercially oriented ones neither make profits or even sustain themselves. All efforts by successive government yield no positive result despite various commissions of inquiry and review parties. The performance of these enterprises still fall short’s of people’s expectation. It is based on this that the researcher finds the need to investigate these problems in Anambra motors manufacturing company (ANAMMCO).
1.2 Statement of the problem.
It is important to note that public enterprises in any given economy has important role to play in the rapid socio-economic development of the country.
Government owned enterprises and business in Nigeria are established to accelerate the pace of economic development in which government is the major investor. Due to the important roles associated with the major public enterprises in Nigeria. There is need for good management for its efficiency. It is a fact that government spends large sums of money in setting up these enterprises and thus, looks forward to making profit. As a result of inefficiency in running these enterprise, federal government and state government have in the recent past set up committee which studied the public corporations and parastatals and recommended privatization and commercialization of some of these enterprises. These enterprises perform so poorly than privately owned business.
Since public enterprises are important in growth of any economy, there is the need to investigate the management problems of public enterprises in Nigeria? Also, there is need to identify the reasons for criticism levelled against them. Despite the enormous investment in public enterprises, is Nigeria obviously not getting good value for the money being spent or invested on these public enterprises. This gives the decision to this research on “management problems of public enterprises in Enugu state” using ANAMMCO as a case study.
1.3 Objectives Of the Study
This study is aimed at the management problems of public enterprises in Enugu state with a view to identifying these problems and therefore coming up with solutions to them as related. This study aims to:
a. Identify the management problems facing the public enterprises.
b. Exam the influence of the problems on the corporators in particular and state as a whole.
c. Identify if there is any impact of government interference on their performance.
d. Give recommendations based on the findings of the study and suggesting suitable ways and strategies of improving the managerial efficiency of ANAMCO.
1.4 Research Questions
1. What are the management problems in ANAMCO?
2. To what extent does prevailing management problems effect the operation of ANAMCO?
3. To what extent does government interfere in the management of ANAMCO?
4. What are the solutions to the management problems of ANAMCCO?
1.5 Significance of Study
In third world countries, public enterprises are noted for their inefficiency and waste of resources. To save the situation, an inquiry is needed in this sector of our economy especially at this time of economic difficulties facing the country.
The country cannot Alford to encourage ort entertain any kind of economic waste in our public enterprises since if efficiency is maximized, it will definitely have a positive effect on the improve standard of living of the general public. This is the significance if this study. It is roped that the study of the management problems in the public enterprises in Enugu state (ANAMMCO) will help management sort some managerial problems so that both workers and organizations will benefit, and the public enterprises will achieve more in future.
The work would be segment to the extent that it identifies these problems and adequate proffer viable solutions to them. It will aid stakeholders of these enterprise in making adequate and appropriate decisions.
1.6 Scope of the Study
This study seeks to cover various management problems identified in the government owned establishment-Anambra motors manufacturing company. The scope of this study covers whatever problems that will hinder the profitability of this company, sustainability and continued growth. They have so many opportunities to study and requires series of contacts in their company.
Also they have useful data for kind of study that agencies needed in their work for company.
1.7 Definition Of Terms
1. Management: this is the net of effectively and efficiently deploying and utilizing the resources of an organization with a view to achieving organizational goals.
2. Public Enterprise: Public enterprises are generally used here to refer to government owned establishment whose main motive for business is not to maximize profit.
3. Efficiency: the act of completing a task or job without waste of resources.
4. Effectiveness: This is used to measure the extent that a task is completed with regard to resources maximized.
5. Problems: Problems refer to bottlenecks or normally or deficiency or lack in experience of an entity.
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