PROJECT TOPIC- Capital Structure and Corporate Performance in Nigeria

Abstract

This study examines the concepts of capital structure and corporate performance in Nigeria. The broad objective of the study is to examine the relationship between capital structure and return on capital employed and also to find out if there is a relationship between capital structure and return on equity. The random sampling technique is adopted in the study. The population consists of all quoted companies in the Nigerian capital market. Data were obtained from annual report and accounts of the sampled companies. Data collected were analyzed using the descriptive statistics while hypotheses formulated were tested using the ordinary least squares techniques. The findings indicated that there is a positive relationship between capital structure and return on asset managed and that there is a negative relationship between capital structure and return on equity. The study recommended among others that companies especially the manufacturing sector should not borrow the maximum amount they are able to and should hold a reserve of borrowing capacity.

CHAPTER ONE

INTRODUCTION

1.1   Background to the study

The majority of Nigerian banks are in ruins which may not be unconnected with the capital structure (debt-equity mix) of the bank. It is therefore imperative for financial manager of bank to determine the proportion of equity-capital and debt-capital to obtain financing mix that will give us optimal capital structure. An optimal capital structure is a critical decision for any business organization (Pandey, 2005).

The decision is important not only because of the need to maximize returns to various organizational constituencies but also because of the impact such decision has on an organization’s ability to deal with its competitive environment. Capital structure is used to represent the proportionate relationship between debt and equity. Equity includes paid- up share capital, share premium, reserves and retained earnings.

In the case of debt, short term borrowing are traditionally excluded from the list of method of financing the firm capital budgeting decision and therefore the long-term claims (such as long term loan and debentures) are said to be a part of the capital structure. The question then is; how much equity do we have? Or how much equity can be raised from all sources? And where will the equity come from? For the majority of companies these questions are relevant, since the corporation did not need to maintain separate equity for their branches.

In as much as capital investment decisions have implications for many aspects of operations and often exert a crucial impact on survival, profitability and growth. Much of the theory in the corporate sector is based on the assumption that the goal of firm should be to maximize the wealth of its current shareholders. One of the major cornerstones of determining this goal is financial ratio. Financial ratios are commonly used to measure firm performances. Generally, corporation includes them in their annual reports to stakeholders. Investment analysts provide them for investors who are considering the purchase of a firm’s securities.

Financial ratio represents an attempt to standard financial information to facilitate meaningful comparisons. It provides the basis for answering some very important questions concerning the financial wellbeing of the firm. Its objectives are to determine the firm’s financial strengths and to identify its weaknesses (Mahdi & Kumars, 2009). This study would therefore seek to establish the fact that there is a relationship between the capital structure and corporate performance.

PROJECT TOPIC- Capital Structure and Corporate Performance in Nigeria

1.2   Statement of problem

Survival and growth needs resources but financing of these resources has limitations. The analysis of the impact of capital choice on profit is as important as the overall existence of the companies’ themselves. It is especially important when one is considering the dwindling fortunes of the aftermath of the global economic recession which might not have been unconnected with inappropriate capital

1.3   Research questions

To this end, the following problem questions are relevant and will be addressed by the study.

  1. What is the relationship between capital structure and Return on Capital Employed (ROCE)?
  2. What is the relationship between capital structure and Return on Equity (ROE)?

iii.    What is the negative relationship between capital structure and Earnings per Share (EPS)?

  1. What is the negative relationship between leverage and Return on Asset Managed (ROAM)?

1.4   Objectives of the study

The study aims at fulfilling the following objectives.

  1. To ascertain if there is a relationship between capital structure and Return on Capital Employed (ROCE).
  2. To find out if there is a relationship between capital structure and Return on Equity (ROE).

iii.    To find out if there is a relationship between capital structure and Earnings per Share (EPS).

  1. To ascertain if there is a relationship between leverage and Return on Asset Managed (ROAM).

1.5   Statement of hypotheses

The testable hypotheses of this research work can be stated thus:

Hypothesis One

HO:   There is a negative relationship between capital structure and Return on Capital Employed (ROCE)

HI:    There is a positive relationship between capital structure and Return on Capital Employed (ROCE)

Hypothesis Two

HO:   There is a negative relationship between capital structure and Return on Equity (ROE).

HI:    There is a positive relationship between capital structure and Return on Equity (ROE).

Hypothesis Three

HO:   There is a negative relationship between capital structure and Earning per Share (EPS).

HI:    There is a positive relationship between capital structure and Earning per Share (EPS).

Hypothesis Four

HO:   There is a negative relationship between Leverage and Return on Asset Managed (ROAM)

HI:    There is a positive relationship between Leverage and Return on Asset Managed (ROAM)

1.6   Significance of the study

Performance measurement is the base of investing and financing decision. Debt holders evaluate performance to decide about interest rate. Investors, on the other hand are interested in evaluating the performance to have knowledge of success of management in applying their capital (Mahdi & kumars, 2009).

To this end this research would help investors to ascertain the impact of capital structure (debt and equity mix) on financial performance.

1.7   Scope of the study

The entire firms in the Nigerian Stock Exchange will constitute the population of the study. A sample of twenty (20) companies was selected to test the theoretical model. For these firms, data were collected for a five year period (2010 to 2015) to allow a thorough evaluation of the capital structure and corporate performance. Based on this, any conclusion, Referencing and recommendation arising from this study may be applicable to other industry or companies in Nigeria.

1.8   Limitations of the study

The problems encouraged in the course of this research include:

  1. Inadequate Study Materials: Research materials were of limited supply due to the practically of the study. Where they were available; the cost involved in sourcing for them was very expensive.
  2. Lack of access of current Data: Most managements and staff of the establishment would not want to disclose important or relevant information about their organization on this subject matter, except were such is permitted by law to be disclosed.

1.9   Definition of terms

  1. Return On Capital Employed (ROCE): This is the ratio that indicates the efficiency and profitability of a company’s capital investments.
  2. Return On Equity (ROE): The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.
  3. Return On Asset Managed (ROAM): This is a measure of profits shown as a percentage of the capital that is
    handled. Return on assets managed is calculated by taking operating profits and dividing it by assets (which could include accounts receivable and inventory). Asset turnover and operating margin are the two main drivers in returns on assets managed.
  4. Return On Asset (ROA): This is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings”, Calculated by dividing a company’s annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as “return on investment”. ROA tells you what earnings were generated from invested capital (assets)
  5. Earnings Before Interest and Taxes (EBIT): This is an indicator of a company’s profitability, calculated as revenue minus expenses, excluding tax and interest. EBIT is also referred to as “operating earnings”, “operating profit” and “operating income”.
  6. Return On Investment (ROI): This is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of taking operating profits and dividing it by assets (which could include accounts receivable and inventory). Asset turnover and operating margin are the two main drivers in returns on assets managed.
  7. Return On Asset (RCA): This is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings”, Calculated by dividing a company’s annual earnings by its total assets, RCA is displayed as a percentage. Sometimes this is referred to as “return on investment”. ROA tells you what earnings were generated from invested capital (assets)
  8. Earnings Before Interest and Taxes (EBIT): This is an indicator of a company’s profitability, calculated as revenue minus expenses, excluding tax and interest. EBIT is also referred to as “operating earnings”, “operating profit” and “operating income”.
    6. Return On Investment (ROT) – This is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.
  9. Earnings Before Interest and Taxes and Depreciation (EBITD): This measure attempts to gauge a firm’s profitability before any legally required payments, such as taxes and interest on debt, are paid. Depreciation is removed because this is an expense the firm records, but does not necessarily have to pay in cash.
  10. Earnings Per Share (EPS): This is the portion of a company’s profit allocated to each outstanding share of common stock. Earnings per Share serve as an indicator of a company’s profitability.
  11. Equity: A stock or any other security representing an ownership interest.
  12. Dividend Per Share (DPS): This is the sum of declared dividends for every ordinary share-issued. Dividend per Share (DPS) is the total dividends paid out over an entire year (including interim dividends but not including special dividends) divided by the number of outstanding ordinary shares issued.
  13. Share Premium: This is the excess amount received by a firm over the par value of its shares. This amount forms a part of the non-distributable reserves of the firm which usually can be used only for purposes specified under corporate legislation.

15.   Retained Earnings: This is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders’ equity on the balance sheet.

PROJECT TOPIC- Capital Structure and Corporate Performance in Nigeria

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CAPITAL STRUCTURE AND DIVIDEND POLICY DECISION AND CORPORATE PERFORMANCE

PROJECT TOPIC- CAPITAL STRUCTURE AND DIVIDEND POLICY DECISION AND CORPORATE PERFORMANCE

Abstract

Over the years, the issue of how developing country’s firms decide between the use of debt and equity as source of finance had been a challenge in emerging market and the new patterns of internal and external financing that have evolved in the global market as an entity. The main statistical tool employed in this work is Pearson’s correlation techniques which will be used to establish the relationship between earning price per share and corporate performance. A sample size of 14 was drawn using random sampling techniques. In the research question three hypotheses formulated. The study used Pearson’s correlation method in testing the hypotheses formulated. The study reveals that there is positive relationship between the retained earnings of firms and their EPS; firm’s optimal debt ratio is determined by trade off between gains of borrowing, holding the firms assets and investment plan is constant, Based on the findings the study recommends: that company should endeavour to desist from employing non professionals like chemist, biologist etc and also government should put in place measure to guarantee  economic and political stability.

CHAPTER ONE

INTRODUCTION

  • Background to the Study

The term advertising appears to be well known to every person across all profession consumers and even buyers aspire to know advertising as much as the advertisers. All aspects of business have advertising implication. As it is very imperative for a course of action on the part of the owner of a business, who is just starting or expanding existing ones to make a careful study of how to get the products or services across to the ultimate consumers.

To assure that product will sell itself due to its high quality or measures to the buyer or consumer is wrong.  Modern business has specifically responding to the need for proper communication by responding to the need for proper advertising. One should not fail to mention that small business management occupies a vital and higher percentage of the economy development of a nation.

This is why small scale business management should be given its pride of place and guide with al seriousness to achieve its desire greatness. The competitive nature of business operating in the same industry calls for the need for advertisement to ensure its survival in the same line of industry. However, the survival of a small business management therefore depends on how well the management of such business can discover the need for necessity of advertising.

The case study of Mr. Biggs which find itself in the fast food business can only secure a better edge among her place as there are competitions in the business. The corporate goals or objectives of the institution under study are to justify the owners investment from the profit after tax. Therefore the whole essence of this research work is to help managers and other interest individual to find a place in their organization that is completely responsible for advertising.  

PROJECT TOPIC- CAPITAL STRUCTURE AND DIVIDEND POLICY DECISION AND CORPORATE PERFORMANCE

  • Statement of Problem

Over the years business fails to grow and survive due to lack of poor advertising techniques adopted by enterprises. Advertising management is a crucial issue in a global business due to the complexity of current business environment. These are set out plans and programmes in order to achieve the set of organizational objectives and goals. Advertising require to find in order to design an effective advertising methods which will have a wider coverage in order to reach out to existing customers and potential customers of  the business product or services.

The researcher is of the view to carryout an investigation to find out the constraint of advertising including the growth and survival of enterprise in Nigeria. However preferred solution and solution and recommendation will be made available at the end of this study.

1.3   Research Questions

This research work will attempt to provide answers to the following questions:

  1. What is the effect of advertising on the total demand for Mr. Biggs products?
  2. How does advertising influence the business cycle?
  3. Does advertising widen consumer choice for the product of the firm?
  4. Does advertising increase sales?
  5. Does advertising facilitate the achievement of goals and objective of small scale business management?
  6. Does advertising help to inform and create awareness?

 

1.4   Objectives of Study

This research is aimed at achieving the following objectives:

  1. To determine if advertising has any significant effect on the total demand for Mr. Biggs products.
  2. To examine if advertising has any influence on the business cycle.
  3. To know if advertising has any widen effect on consumer choice for the product of the firm.
  4. To examine if advertising has any significant effect in increasing sales.
  5. To examine if advertising has any significant effect in facilitating the achievement of goals and objective of small scale business management.
  6. To examine if advertising help to inform and create awareness.

 

  • Statement of Hypotheses

With regard to the above, central research question arising from the statements of the problem and the objective of the study, leads to the researcher to the formulation of the following hypothesis. The negative assertion is called the alternative hypothesis (Ho) while the positive assertion is called the null hypothesis (HI).

Hypothesis One

Ho:  Advertising does not facilitate the achievement of goals and objectives of small scale business management.

HI:    Advertising does facilitate the achievement of goals and objectives of small scale business management. 

Hypothesis Two

Ho:  Advertising does not increase sales and profitability.

HI:    Advertising does increase sales and profitability.

Hypothesis Three

Ho:  Advertising does not inform and create awareness.

HI:    Advertising does inform and create awareness.

 

  • Significance of the Study

The objective of this research study is to examine the problem being faced by small scale business of Mr. Biggs enterprise as a result of not having good economic (e.g. market economic) and to suggest good solution to these problems. If this objectives are met, it follows that this work will at the end contribute significantly to the importance of advertising in small scale business management.

This study attempts to produce information to bridge the information needs of the potential and actual investors. Therefore, the following categories will benefit immensely from the findings.

  1. Potential Investor: It will serve as a guide in determining the value of the business that would finally have an influence on their investment decision.
  2. Management: It would expose them to improve practices as well as help to know the importance of advertising in small scale business.
  3. Public: It will enlighten the public on the need for advertising in small scale business management. It will also benefit the public in the area of providing relevant information for the future researchers.
    • Scope of the Study

This study is restricted to the relevance of advertising in the management of small scale business in Nigeria a case study of Mr. Biggs. Due to time and cost constraints the entire Mr. Biggs in Nigeria can not be used for this study. Hence, a sample size of 3 (three) one in Auchi and two in Benin (i.e. one in Sapele Road and one in Ugbowo Road).

The date was obtained using a cross section of Mr. Biggs fast food restaurant in Edo State for the period of 2009 – 2013. 

 

  • Limitations of the Study
  1. Outstanding constraint is the unwillingness on the part of the respondent to give correct and convincing information about their business.
  2. Generalization of result may not be correct since the study was limited to advertising in small scale business enterprise with special emphasis on Mr. Biggs which does constantly represent the performance of all the small scale enterprise in the country.
  3. The smallness of the sample size is also a constraint to this research project.

 

  • Definition of Terms
  1. Advertising: This is the purpose to promote the image of a corporation rather than the sale of a product or service, also called institutional advertising is also use to create public awareness of a corporation or to improve its reputation in the market place. (Brovee, 1992).
  2. Small Scale Business: The federal government small scale industry development plan of 1980 defined a small scale business in Nigeria as any manufacturing process or services industry with a capital not exceeding N150,000 in manufacturing and equipment alone.
  3. Management: Involves ensuring that work activities are completed with highest degree of efficiency and effectives by those responsible for carrying out the responsibilities.
  4. Promotion: The element of the marketing mix that include all forms of marketing communication. It is the ingredients used to inform an persuade the market regarding companies product the market regarding companies product.
  5. Organization: A project, a business of a person or group of persons. A company making and selling things.
  6. Consumer: This is a person or group of persons who are the final users of products or services generated within a social system.

Marketing: This is the process of communicating the value of a product or services to customer for the purpose of selling the product or services. It is a critical business function for attracting customer.

PROJECT TOPIC- CAPITAL STRUCTURE AND DIVIDEND POLICY DECISION AND CORPORATE PERFORMANCE

CORPORATE GOVERNANCE: A TOOL FOR DIRECTING AND MANAGING BUSINESS EFFICIENCY AND SURVIVAL

PROJECT TOPIC- CORPORATE GOVERNANCE: A TOOL FOR DIRECTING AND MANAGING BUSINESS EFFICIENCY AND SURVIVAL

CHAPTER ONE

INTRODUCTION

1.1   Background to the Study

Corporate governance has been defined as the way and manner in which the affairs of companies are conducted by those charged with the responsibility. It is a system that ensures optimal utilization of resources for the benefits of shareholders while meeting societal expectations. Given the high correlation between corporate governance and investor decisions, the government of Nigerian is keen to position the country to take advantage of the opportunities in the global market by adhering to principle of good governance, thus, Securities and Exchange Commission (SEC) and the Corporate Affairs Commission (CAC) came out with seventeen (17) member committee and drafted the code of best practices for corporate governance in Nigeria.

Depending of the jurisdiction, different bodies may have responsibility of corporate governance, board of Directors, Audit Committee and other supervision committees. International Standards on Auditing (ISA) 260, requires the auditor to determine those persons charged with corporate governance. The most direct of corporate governance is to shareholders. However, the ultimate benefit is the more efficient allocation of capital to its most productive uses.

In the real sense, no governance system, no matter how well designed, will fully prevent greedy and dishonest people from putting their personal interests ahead of the interests of the companies they manage. Many steps can be taken to improve corporate governance and thereby reduce opportunities for accounting fraud. This is where the role of auditing (through proper audit reports) comes into play.

The auditor does not have a direct corporate governance responsibility, but rather provides a check on the information aspects of the governance system. The role of auditors in corporate governance involves reporting, decision making, accountability and monitoring. Decision requires relevant and reliable information, accountability involves measuring, reporting and transparency, and monitoring includes system and feedback.

Auditor’s primary role is to check whether the financial information given to investors is reliable, i.e. if its expressed the true and image of the organization. The objective of an audit is to express an expert opinion on the fairness with which the financial statement are prepared and presented, in all material aspects a company’s financial position, results of operations, and cash flow in conformity with GAAP to be able to express such an opinion. This must be done using sound auditing techniques.

People rely on financial statements to make economic decision, especially the shareholders, that is, an enterprise outside the organization. With the help of audit work by the external auditor, risk and uncertainty are reduced. Error and fraud can cause irregularity in the case of financial report or statement of any organization. It is the responsibility of the auditor to verify the cause of any irregularity of the auditor to verify the cause of any irregularities in the financial statement.

One perception to corporate failures has been to focus on public companies internal controls. Sarbanes-Oxley Act (2002) (SOX) requires a separate report on the effectiveness of internal controls. Recent changes to ISAs place a much higher focus on the auditors understanding internal controls as a part of the audit. Corporate governance is nothing more than how a corporation is administered or controlled.

Corporate governance takes into consideration company stakeholders as governmental participants, the principle participating being shareholders, company management, and the board of directors. Adjunct participant may include employees and suppliers, partners, customers, governmental and professional organization regulators and the community in which the corporation has a presence.

There are so many interested parties, its inefficient to allow them to control the company directly. Instead, the corporation operates under a system of regulations that allow stakeholders to have a voice in the corporation commensurate with their stake, yet allow the corporation to continue operating in an efficient manner. Corporate governance also takes into account audit procedures, in order to monitor outcomes and how closely they adhere to goals, and to motivate the organization as a whole to work toward corporate goals, by using corporate governance procedures widely and sharing results, a corporate can motivate all stakeholders to work toward the corporation goals by demonstrating the benefits to stakeholders of the corporation success.

According to Alfaki (2005), corporate governance are the rules and practices that govern the relationship between managers and shareholders contributes not only to the growth and financial stability of corporate enterprise but also promotes financial intensity and economic efficiencies.

PROJECT TOPIC- CORPORATE GOVERNANCE: A TOOL FOR DIRECTING AND MANAGING BUSINESS EFFICIENCY AND SURVIVAL

1.2   Statement of Problem

In Nigeria like most countries, the failure of companies can be due to internal or external factors or in rare cases, the combination of both which basically has to do with poor corporate governance. The researcher intends to focus on reforms as aspect of corporate governance and indicators of business failure as well as the linkage between the two concepts. The study also intends to raise the consciousness and institutionalize good corporate governance and business sustainability. For effective corporate governance reduces “control rights” shareholders and creditors confer on managers, increasing the probability that managers invest in positive net present value projects

1.3   Research Questions

In the study the following research questions are asked in order to achieve the objectives of the studies

  1. Does corporate governance affects vital issue of firm’s performance?
  2. Is corporate governance essential in achieving public confidence in corporate entities?

iii.    Is company failure a result of non existence of corporate governance?

 

1.4   Objectives of the Study

The primary objectives of this study are:

  1. To find out if corporate governance affects vital issue of firm’s performance.
  2. To ascertain if corporate governance is essential in achieving public confidence in corporate entities.

iii.    To determine if company failure is as a result of non existence of corporate governance.

1.5   Research Hypotheses

Hypothesis One

HO:   Corporate governance affects vital issue of firm’s performance

HI:    There is no significant relationship between corporate governance and firm performance.

Hypothesis Two

Ho:  The effect of corporate governance is not essential in achieving public confidence in corporate entities

HI:    The effect of corporate governance is essential in achieving public confidence in corporate entities.

1.6   Significance of the Study

In regards to the relevance of the study it covers areas which are useful to the board of directors as regard to their mission, vision, objectives and strategy of a company. It is relevance to shareholders by booming their confidence to invest in a particular business which involves protecting their rights.

Companies will benefit as it ensures, the financial availability business. It also indicates that the way in which companies are directed and controlled through governance principles of disclosure and accountability of a company. It is also relevant to the public sector. Public sector will benefit as it will ultimately improve economic growth and functional position of the country on a global level. It is also used as a determinant in developing policy, social economic analysis and poverty resolute issue.

1.7   Scope of the Study

This study examines corporate governance and firm’s performance using Guinness Nigeria Plc as a case study. This research essentially focuses on the process and structure in which firm performance and corporate governance are directed, manage and controlled. A time frame of 5 years was used which range from 2010 to 2015. For effective correlation, a sample size of 100 was used.

1.8   Limitations of the Study

The study certainly suffers from a number of limitations prominent among them includes:

  1. Primary data collected by previous researcher could have been manipulated hence, altering good conclusion in that could have been drawn from them.
  2. Sizeable quality of information obtained from papers were in pigmentation and sometimes complex.
  3. Reduction of the respondent to full the Questionnaire
  4. Limited literature in this area of study
  5. Sizeable quantity of information obtained from papers were in fragmentations and sometimes complex.
  6. Reluctant of the respondent to fill the questionnaires.

1.9   Definition of Terms

Management: Is a distinct process consisting of planning, organization, starring, directing, coordinating, reporting and budgeting, performed to determine and accomplished stated objectives with the effective use or human being and other resources.

Cooperation: Cooperation is a big company or group of companies acting together as a single organization for a particular purpose with a legal entity distinct from its owners.

Strategic Planning: Strategic planning is a process of determining the major objective of an organization and the policies and strategies that will govern the acquisition, use disposition of reassures to achieve set objectives.

Planning: Planning is the establishing of objectives and the formulation, evaluation and selection of policies strategies, faction and actions required to achieve set objective.

Efficiency: A level of performance that describe a process that uses the lowest amount of inputs to create the greater amount of outputs.

Business: An economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth.

PROJECT TOPIC- CORPORATE GOVERNANCE: A TOOL FOR DIRECTING AND MANAGING BUSINESS EFFICIENCY AND SURVIVAL

Corporate Governance And Business Failures In Nigeria: A Focus On The Nigerian Banking Industry

PROJECT TOPIC- Corporate Governance and Business Failures in Nigeria: A Focus on the Nigerian Banking Industry

Abstract

The project examines the Corporate Governance and Business Failures in Nigeria: A Focus on the Nigerian Banking Industry. The study main objective is to find out the relationship between corporate governance and business failure. The primary source of data collection was used in gathering data from respondents. A structure questionnaire was designed by the researcher and validity by two experts from the statistics department was used to obtain data and chi-Square (X2) was used to test hypotheses formulated. It was discovered that business failure in Nigeria are caused by poor corporate governance. It also found that government and corporate codes i.e. best practices play a crucial role in the corporate governance of firms. It was concluded that the different roles of the participants in corporate governance are pre-requisite for the survival of a firm. As a way of recommendation, corporate Nigeria therefore needs to raise the consciousness and institutionalize good corporate governance and business sustainability beyond lip service.

CHAPTER ONE

INTRODUCTION

  • Background to the Study

Long before the highly publicized corporate scandal and failures worldwide, the global community has shown increasing concern on the issue of corporate governance. The reason for this trend is viewed from the perspective that corporate governance is about ensuring that the business is run well and investors receive a fair return (Magdi & Nadereh, 2002). According to Wolfensohn (1999) and Akinsulire (2006), the distribution of rights and responsibilities amongst different participants such as the board, managers, shareholders and other stakeholders in spelling out the rules and procedures for making decision on corporate affairs is basically specified by the corporate governance structure.

Another school of taught viewed corporate governance from two perspectives: A “Narrow’ one that basically concerned with the structure within which a corporate entity or enterprise receives its basic orientation and direct ion (Rwegasira, 2000). A “Broad” perspective that is regarded as the heart of both a market economy and a democratic society (Sullivan, 2000).

However, these ideologies have been compromised and the resultant effect t is seen in prob5ressive increase in mortality rates of hitherto global corporate giants in developed economies.
Enron, Pamalat, Barynx Bank and WorldCom are recent and vivid examples and as such the study intends to examine these issues and suggest the way forward.

1.2   Statement of Problem

In Nigeria like most countries, the failure of companies can be due to internal or external factors or in rare cases, the combination of both which basically has to do with poor corporate governance. The researcher intends to focus on reforms as aspect of corporate governance and indicators of business failure as well as the linkage between the two concepts.

The study also intends to raise the consciousness and institutionalize good corporate governance and business sustainability. For effective corporate governance reduces “control rights” shareholders and creditors confer on managers, increasing the probability that managers invest in positive net present value projects (Shieifer & Vishny, 1997).

1.3   Research Questions

The following questions direct the thrust of the study:

  1. Is there any significant relationship between corporate governance and business failure?
  2. What is the role of the participants in corporate governance structure as regard business failure?

iii.    What are the roles played by corporate governance participants?   

 

1.4   Objective of the Study

  1. To find out if there is any significant relationship between corporate governance and business failure.
  2. To find out the relationship between participants in corporate governance structure and business failure.

iii.    To find out the role played by corporate governance participants.

1.5   Statement of Hypothesis

Hypothesis One

HO:   There is no significance relationship between corporate governance and business failure.

HI:    There is a significance relationship between corporate governance and business failure.

Hypothesis Two

HO:   There is no significant relationship between business failure and the role played by corporate governance participants.

HI:    There is a significant relationship between business failure and the role played by corporate governance participants.  

PROJECT TOPIC- Corporate Governance and Business Failures in Nigeria: A Focus on the Nigerian Banking Industry

  • Significance of the Study

In regards to the relevance of the study, it covers areas which are useful to the board of directors as regards to their mission, vision, objectives and strategy of a company. It is relevance to shareholders by boosting their confidence to invest in a particular business which involves protecting their rights.

Companies will benefit as it ensures the financial viability of business. It also indicates the way in which companies are directed and controlled through basic governance principles of disclosure and accountability of a company. It is also relevant to the public sector. Public sector will benefit as it will ultimately improve economic growth and functional position of the country on a global level. It is also used as a determinant in developing policy, social economic analysis and poverty resolute issue.

  • Scope of the Study

The study is not directed at explaining or providing solutions to all corporate failures in Nigeria because some failures are actually outside the organization’s frontiers.

It is narrowed down to those failures that could be averted if organization would embrace corporate codes and play by the rules.

The geographical scope of this study is Nigeria and Edo State in particular and a sample size of 96 was used.

1.8   Limitations of the Study

Corporate governance is not a physical phenomenon, so it cannot be measured ordinarily as there are different dimensions to the concept.

The factors that militate against the researcher’s ability to come out with concrete findings during the course of researching includes:

  1. Lack of necessary materials: The materials sought were not sufficient for the research as for text works and business journal needed were not gotten at the right time.
  2. The problem of retrieving the questionnaire: Some questionnaires issued to respondents were lost during the attitudes of the respondents to disclose their personal information.

1.9   Definition of Terms

  1. Corporate Governance: It is the system by which business corporations are directed and controlled (OECD, 1999)
  2. Business Failure: It is a situation in which a company finds itself unable to generate enough funds both internally and from outside source to finance its operations (Osaze & Anao, 1990).
  3. Corporate Governance Structure: This constitutes yardsticks by which corporate governance can be measured in an organization i.e. (board size, board composition, CEO status, audit committee).
  4. Participants in the Corporate Governance Structure: They are the various groups which has stake in the company i.e. (Board of Dir3ector, Shareholders, Stakeholders, etc).
  5. Corporate Codes: These are institutional arrangements and regulatory authority providing the best practices for companies in Nigeria.

6.     OECD: The Organization for Economic Cooperation and Development.

PROJECT TOPIC- Corporate Governance and Business Failures in Nigeria: A Focus on the Nigerian Banking Industry

SIGNIFICANCE OF ADVERTISING IN THE MANAGEMENT OF BUSINESS ORGANIZATION

PROJECT TOPIC- SIGNIFICANCE OF ADVERTISING IN THE MANAGEMENT OF BUSINESS ORGANIZATION

ABSTRACT

This study aims at analyzing the significance of advertising in the management of business organization using selected small business organization. The main objective of this work is to identify and highlight the prospects of advertising in small scales business to know whether advertising increase the sales of a product ad how and also to identify the problems of advertising in small scale business and suggest possible ways buy which they could be resolved. The research survey method was used to gather information and hypotheses were tested using chi-square statistical tool. The study however concluded that small business is seen to be so because it has no means of expansion but by creating awareness, the business stands an opportunity to grow and becomes larger in size. Therefore, advertising is important to small business management. It was recommended amongst others that the management of small business should adopt the use of advertising at the early stage of the product life cycle or at the introductory stages of the business and that the product should be good and presented to consumers in such a way that it can speak for itself so that a few terms will be used in the advertisement to catch the people attention and to reduce advertising cost.

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

  In the management of small business organization advertising appears to be one of the major tools that management uses to actualize its goals and objectives the word advertising seems to be very popular to all profession due to the vital role that it play in the achievement of organizational objective consumer and buyers in most cases aspire to know about a product through advertisement, even much as he advertiser would deem it necessary to punch a product information into the market for awareness.

This is as a result of the fact that each participant in the exchange process is in most cases confronted will the problem of searching the buyer goes out in search of a seller a buyer it is therefore important for the owner of business to make a careful study of how to get the product information across to the ultimate consumers of such product. the provision of such information is done in a number of ways adverting includes. A small business is small in most cases when the awareness is low. An increase in the levels of awareness does in most cases result to corresponding increase in the sales of the product increase in sales can lead to bigger enterprise which is the target if the small business manager. The important role of advertising in the respect cannot be over emphasized. This project will therefore examine the significance of advertising in the management of small business organization

 

1.2    STATEMENT OF PROBLEM

Advertising is essentially one the common promotional tools that most organization uses of actualize their objective and goals advertising mainly uses to create awareness, stimulates consumers inertest on a product general high patronages and increase sales volume in an organization.

In spite of the great benefits of advertising most small business shows little or no concern about advertising their products. More so the inability to advertise has crippled as lot of small business organization over the years.

These studies on the significance of advertising in the management of small business organization shall be restricted to answering the following

 

1.3    RESEARCH  QUESTION

  1. Does advertising play any important role in the management as small business organization
  2. To what extent does advertising asset in the expansion of a small business?
  • Are small business owners willing to advertising what are their strength and weakness
  1. What would be the fate of a small business organization if not advertised?

The above question will uses as a guiding rule the will help the researcher to design tools to extract necessary information to proffer a solution to the reach question

 

1.4    OBJECTIVE OF STUDY

          There are

  1. to identify and highlight the prospects of advertising in small scales business
  2. to know whether advertising increase the sales of a product ad how
  • to identify the problems of advertising in small scale business and suggest possible ways buy which they could be resolved
  1. to know if high cost of advertising does not prefer small scale bossiness from advertising
  2. to know how advertising facilities their achievement of goals and objective in small scale business of goals and objective in small scale business

PROJECT TOPIC- SIGNIFICANCE OF ADVERTISING IN THE MANAGEMENT OF BUSINESS ORGANIZATION

1.5    RESEARCH HYPOTHESIS

          Since the study seeks to know the significance of advertising in the management of small business organization.

          The statement of hypothesis would be these

  1. Ho: advertising does not increase in sales of product
  2. Hi: advertising increaser the sales of a product

Ho: high cost of advertising does not percent small business from advertising

  • Ho: advertising does not facility the achievement goals and objectives of small business organization

Hi: advertising facilitate the achievement of goals and objective of small business organization

 

1.6    SIGNIFICANCE OF STUDY

The study is most relevant to business owners as it will expose them to the under attending of flow to communicate effectively with the public and at the same time help to increase the sales at their products it will also them to compete fevouraby with other business owners within the industry in which they operate

The study is equally relevant to the public in that it will educate them on how to identify, purchase use and store their acquired products.

Finally, this research project is aimed at findings a lasting solution to problem of small scale business ad to help appreciate advertising in the sector

 

1.7    SCOPE OF STUDY

  This study is basically selected it investigate the relevance importance at significance of advertising in the management of small business organization the focus cut across problems land prospect of advertising in relation to small business organization Auchi  a case study. It will also dwell on how to use advertising in small business in a more effective and profitable manner across to the target audience. An attempt will be made to identify possible problems organization and also suggest possible problems. Finally typically advertising decision in small business organization are going to be acceded in this study.

 

 

1.8    LIMITATION OF THE STUDY

This include the inability of the researcher to study the totality of the population within the scope of the case study

There was also the problem of not being able to directly get in contact with the respondents (small business owner/ manager except a few.

There was of course the problem of double response on the administered questionnaire which is why the researcher could only give a near perfect analysis to the data collected. Also the challenge of not able to get good material from the secondary sources was not hidden in the process of carrying out.

This research this was however comminuted to substandard school library and the poor networking of the local cyber café around here.

 However the research work was carefully done.

1.9    OPERATIONAL DEFINITION OF TERMS

ADVERTISING: This denotes any pad form of non personal presentation an promotion of ideas foals or services by an identified sponsor (AMA 1960)

          It is also used mean a public promotion of some products services by a know sponsor (web definition

PUBLIC: Populace people in general considered as a whole a group or a body of people that share some common interest

Source: the oxford advanced learners dictionary defined source as a place, person and thing that you get something from.

          It is the begging the generator and the initiator of a message through a channels to an audience e.g sales person who wishes to communicate a sales message to a people communication: it is seen as a process of passing information from one end to the other it is process of interaction between two and more persons.

          The dictionary also have it as the activity of process of expressing ideas and feeling at giving people information i.e speech, which in the fasted method of communication

MEDIA: It is seem as the main ways that a large number of people receive information ad entertainment it is the channels through which messages are conveyed to a target audience e.g news paper magazines direct mails radio television e.t.c.

FINANCE: This is used to mean money used, to run a business, an  activity or a project. It is activity of managing money and or money available to a person, an organization or a country.

CAPITAL: This is  the amount of money that is invested ort used to start up a business.

FREQUENCY: it is used here to mean the relate which something happen and is repeated the fact of something happening often, i.e the number of time that ton advertisement is delivered through a particular medium

IMPACT: the powerful effect that something has on something or something else, the effects of one objective on the other value in exposure through a given medium

Business this would be seen as a commercial activity engaged in as a live hood such as trade a profession occupation or a particular field of Endeavour

OBJECTIVE: Something that you aim i.e what you are trying or weaning to achieve

ORGANIZATION: It is defined in the dictionary as a group of people who form a business clubs e.t.c together in order to achieve a particular aim it also means the total business enterprise including facilities martial money and manpower. It can also be seen as a creative procedure

RISK: reference to the measure of uncertainly about their outcome of an event.

PROJECT TOPIC- SIGNIFICANCE OF ADVERTISING IN THE MANAGEMENT OF BUSINESS ORGANIZATION