Many factors have been fingered and blamed for low productivity of Nigerian economy, prominent among which is the weak industrial base. And this weakness is indicated by the low level of the index of capacity utilization in the manufacturing sector and general high rate of business failure in Nigeria.
Having considered the problems from the accounting point of view, the researcher formed an opinion that EXPANDED (OR QUICK) PROFIT MOTIVE is a fundamental factor for failure of entrepreneurial efforts; this opinion considers the proper management of available resources – especially financial resource – as a primary factor that will make for success of a business venture.
This expanded profit motive manifests in various forms, which include (a) lack of compliance to loan repayment schedule, (b) venturing into business without business ideas. (c) Over-pricing of products, (d) Employment of unskilled labour and high labour turnover etc.
But whatever form(s) such manifestation may take, ultimately they culminate into poor discharge of business functions.
Accordingly, this research was driven by the investigation and assessment of various manifestations of Expanded profit motive as to establish the truth or otherwise and the extent of their contributions to business failure. The investigation was carried out on the basis of five (5) stated hypotheses about which the research revolved.
Besides the data collected from ALO Aluminum Company inform of responses obtained from questionnaires, the researcher visited some other establishments which are considered to be in position to have a store of data and numerical information that would have been useful for comparative analysis.
Those organizations visited did not permit the researcher to avail the required data, and this made it difficult to use standard statistical technique, such as correlation coefficient and distributions in the analysis of data. Consequently, the researcher resorted to the use of simple percentage, published and verbal information as basis for conclusion. The research result suggests that every rational business owner/manager should strike a balance between profit motive and need for business survival.
1.1: BACKGROUND TO THE STUDY
Since I became an accounting student and gradually came to be deeply sensitized on the issue of business management theories and practice, I became generally interested in studies related to Entrepreneurial Development, but particularly excited at the enquiries into the causal factors of both success and failure of Entrepreneurial Effort.
The desire for this enquiry is partly driven by my personal aspirations but mainly sustained by what I consider as easily observable poor state of private sector of Nigeria economy, poor contribution of this private sector to the growth of the economy and poor state of industrial development in Nigeria.
All these, by extention, mitigate the national quest for job creation with the attendant well known negative consequences for the socio-economic wellbeing of Nigerian Nation.
In this present research effort, I would generally discuss the importance of a widespread culture of entrepreneurship business actions in the establishment and sustenance of a private sector driven economy especially in this introductory chapter.
The investigation proper is intended to seek and reveal the causes of failure of most of the entrepreneurial efforts and focus particularly on the extent of the contribution of ‘Expanded profit motive (objective)’ to the failure of entrepreneurial ventures (small/medium business).
Looking at the present nature of the economy of Nigeria more holistically many concerned economics and business management scholars have received with great concern and lamentations, the present near total reliance on export of crude oil and raw material as sole source of sustenance for the economy. For this, the economy lacks in strength (viability) and stability since it is being operated without the requisite viable technological and industrial base.
For many years running now, Nigeria has expressed and preached her desire to achieve some scientific and technological feat which will help her effort to industrialize. It is to be acknowledged that the effort is still on-going, though at a very slow pace. But in keeping with the opinion of Animalu (2000; iii), for Nigeria to return to the (right) course, we (Nigeria) shall begin with a statement of the problem of development in the contemporary world (Nigeria) in terms of the concept of a plan perspective cycle of a modern society which relates (military) security to political stability, political stability to economic strength, economic strength to scientific knowledge, scientific knowledge to technological know how) to (military) security.
“The different between an industrialized and a developing society is shown to lie in the degree of establishment of the plan perspective cycled in the society and to be the underlying principle behind the current strategic planning methodology in Science, Engineering and technology (SET)-driven enterprises..”.
“On August 19,1999, the united Nations Development programme (UNDOP) launched its 1998 and 1999 Human Development Report at Nigeria’s Federal Capital Territory, Abuja. With an overall Human Development Index (HDI) i.e. longevity, education and income of 0.400; Nigeria ranked 137th out of a total of 174 countries in the world in 1993. Speaking on the occasion, President Olusegun Obasanjo stated that the problem before the new democratic administration of Nigeria is to fine-tune policies and programmes to ensure a balance between macro-economic stability and human centered development. Observing that poverty is the denial of choices and basic opportunities to live a tolerable life materially, psychologically, politically, socially and culturally (and) he declared that ‘policies must not depend solely on market forces—’
“Our task— is to conceptualize, analyze and proffer solution to myriad of problems, by examining how other countries have performed in trying to achieve our own higher HDI through industrialization and what we must do to achieve our own. Industrialization is about manufacturing of product by companies that empower people economically by offering them employment. Therefore industrialization relates to how people in a society are organized for productive work which impacts on the society’s quality of life. Technically speaking, industrialization is a product of manufacturing technology and industrial engineering—.
To a very good extent, “the fact that Nigeria has not been able to produce the required organization for industrial take off is largely and rightly blamed on our leadership or— on the (neo-colonial) political organizations that we have inherited from our erstwhile colonial masters and the war leaders of the post-independent military dictatorship era. We shall conceptualize this type of organizational problem by an inverted pyramid (see fig 1.1) signifying an unstable system, on its head (military dictatorship) which despite all types of promises of change, has produced in the end only (a) fiscal indiscipline (b) corruption and daunting national debt burden (c) religious intolerance and ethnic strife (d) labour unrest and cultism, ignorance and disease, comprising the four vertices at the base of the inverted pyramid.