THE ROLE OF ACCOUNTING INFORMATION IN ACHIEVING ORGANIZATIONAL EFFECTIVENESS (A CASE STUDY OF NIGERIAN BOTTLING COMPANY PLC ENUGU)
1.0 BACK GROUND OF THE STUDY
All “Business” – industry, commercial and government involves capital, men, and materials, utilizing services rendered by transportation, finance, banking, insurance e.t.c to achieve its aims and objectives.
Management is constantly faced with the problems of making alternative decision to enable them achieve the organizational effectiveness faced with the facts that resources are relatively scarce and limited, management do not only seek to ascertain cost at various stages in the process of providing a product or service but also to make proper and accurate decision at all levels in the modern organization. This process can only be facilitated by the proper utilization of adequate and accurate accounting information.
Accounting may be defined as the process of collecting, recording, presenting and analyzing/ interpreting financial information for the use of financial statement.
The American accounting association (AAA) defines accounting as “ the process of identifying, measuring and communicating economic information to permit informed judgments and decision by users of the information.
The accounting information being discussed here, come from different disciplines of accountancy profession as stated below.
- Financial information from financial accounting
- Cost information from cost accounting
- Performance Evaluation and compliance from auditing
- Taxation information from taxation accounting
- Management information from management accounting
- FINANCIAL ACCOUNTING:-This account deal with the recording, classifying and summarizing of financial transaction or events in terms of money and reporting the result to management and other users of accounting information.
- COST ACCOUNTING:- “Costing is a systematic analysis and recording of financial transaction in respect to material, labour, and expenses, the collection and interpretation of these records to disclose cost of particular products or services and the application of this financial information for the purpose of efficient and effective running of the business” Prof. B .C. Osisioma in his book studies in accounting.
- PERFORMANCE EVALUATION AND COMPLIANCE FROM AUDITING: – This account deals with systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating result to interested users. By the American Accounting association (AAA).
- TAXATION ACCOUNTING:- This deals with the sum total of the assessment of tax; the imposition of compulsory sums of money by the government or its agencies on individuals and firms, the collection of and the accounting for the levied amounts, and the keeping and auditing of tax records
- MANAGEMENT ACCOUNTING:- Management accounting is the process of identifying, measuring, accumulating analysis, preparing, interpreting and communicating information that helps managers to fulfill organizational objective (Horngren 1995:3)
A BRIEF HISTORY OF THE NIGERIAN BOTTLING COMPANY PLC, ENUGU
The Nigerian bottling company plc, makers of soft drinks such as coca-cola, sprite, fanta, gingenle, fanta tonic and krest Bitter lemon, is closer as the study because it is very large and outstanding brewing industry in Nigeria which accounts for almost 60% of total soft drinks produced in the country and because of the indiscriminate rise in the prices of their products, which is attributed to cost of their production.
The company is situated in Enugu state of Nigeria and it is just one branch out of the nineteen (19) plants that make up the company in federation.
Coca- cola first came into Nigeria in 1953 when Nigeria bottling company set up its first plant in Lagos. The company has since grown. Today, Nigeria bottling company is Nigerians number one bottler of soft drinks, selling about seven (7) millions bottles a day. A figure, which is still growing with the opening of new plants and establishing of new customers in various parts of the federation.
The success of coca-cola has brought with it, the development of a number of sister industries all contributing to the growth of Nigerian economy. The companies are the Delta glass company in Ughele which supplies the million of bottles required keeping a large bottling company in operation, the crown product factories in ijebu ode and Kano, which manufactures the metal crowns to seal the bottles, and Bernin Plastics Company, which make plastics crates for carrying the bottles. In addition the trucks which are a familiar sight in many parts of the country, delivering soft drinks to more that 70,000 dealers are also assembled in Nigeria. Nigerian bottling company employs over seven thousand (7000) Nigerians in all fields of operation and it is also worthy of mention that it oldaned the Nigerian stock exchange 1984/85 years certificate of merit in manufacturing sectors for the best presentation, quality and depth of its Annual Report and Accounts.
Quality is the key word, which determines success of the whole operation. Only the best ingredients are used for making the soft drink and sophisticated working and filling equipment has been installed at all plants. Extremely high standards of hygiene are maintained to ensure that top quality products reach the customers.
The manufacturing process for coca-cola is based on a carefully measured combination of sugar, water and concentrates. The same standard is maintained throughout the world. Coca- cola is bottled in all the major cities in the country. Nigeria bottling company plc is a subsidiary of A. G Levant’s plc.
1.1 STATEMENT OF THE PROBLEM
Some business organization within the nation encounters management inefficiency. These problems militate against the achievement of the ultimate corporate objective, which is the optimization of profit. These problems range from the non-acquisition and proper utilization of accounting information.
Accounting information provided by inexperienced and unqualified accountants are in most cases inaccurate and could not meet the information require of manager to work efficiently. At times when accurate accounting data are made available the manager, do not make use of it, due to their inability to interpret such data. All these contribute to organizational ineffectiveness.
1.2 OBJECTIVE OF THE STUDY
In consideration of the question which are to be raised, the accounting services function provide for managers what this study is all about.
The objective include:
- To review the case of failure in the attainment of organizational objectives
- To give an explanation of what accounting information are, and the various ways each of these users utilize these information and the benefit derivable from them.
- To find out how accounting information helps the management in achieving organizational effectiveness.
- To highlight managers neglect of accounting information and its resultant effect to the organization.
1.3 RESEARCH HYPOTHESIS
To have a sound basis for this research project, the researcher considers it imperative to build hypothesis. It will also serve as guidelines to the project.
- Ho: Accounting information does not aid management in achieving its organizational effectiveness.
Hi: Accounting information aid management in achieving its organizational effectiveness.
- Ho: The achievement of organizational effectiveness does not solely
depend on the nature of the accounting system.
Hi: The achievement of organizational effectiveness solely depends
on the nature of the accounting system.
1.4 SIGNIFICANCE OF THE STUDY
This research work will be of utmost importance to all interested beneficiaries in the organization.
This study will help in bringing into line light in adequacies emanating by the use of inaccurate and proper accounting information.
The research will of importance to government in the sense that application of accurate and proper accounting information will generate revenue to the government.
To the business in the sense that keeping accurate accounting information will enable the management to have a true picture of the trend in the organization and as will as ascertain the relationship existing between asserts and liabilities, to know when the later exceed the former. It also assists the shareholders to appreciate the progress and recent development in the business.
1.5 LIMITATIONS AND DELIMITATION OF THE STUDY
In the course of this study, the researcher encounters some problems, for it was not very easy to collect the required information based on the following factors.
TIME:- Time was one of the major constrain to the researcher, being a student has a very limited time to visit the case study and other places of interest.
FINANCE:- To succeed in getting the required information for this study involved many visits to certain areas or places by the researcher. For instances the distribution and collection of questionnaires
ATTITUDE OF RESPONDENTS:- The respondents created another constraints, the unwillingness of the respondents to disclose certain information mainly for security purpose of the organization.
LOWER LITERATURE SOURCE:- As a research work, efforts made to acquire adequate literature sources did not yield all that fruitful result.
Not withstanding all the above constraints, the researcher was able to carry out this research successful, within the specified time.
1.6 DEFINITION OF TERMS
Ama (1999:4) Accounting is simply the process of recording, classifying, reporting and interpreting the financial data of an organization to management and other interested users.
ACOUNTING SYSTEM: An accounting system is a formula mechanism for gathering, organizing and communicating information about organization activities. (Horngren 1995:3)
BUDGET:- Uzoma (1991:64) Defines a budget as a formula written statement of management plans for the future, expressed in financial terms.
CONTROLLING:- Onuola (1993:2) defines controlling as establishment of standards measuring the actual performance against these predetermined objectives and taking corrective action if necessary.
EFFECTIVENESS:- This is the ability of bringing about the intended result (Horn by 1974:281)
INFORMATION:- Information is data that has been processed and that will increase knowledge in a decision environment.
MANAGEMENT:- Akpala (1987:5) Defines management as the process of combing and utilizing or allocating organization inputs (Men, materials and money ) by planning, organizing, directing and controlling for the purpose of producing output (goods and services or whatever the objectives are) desired by customer so that the organization objectives are accomplished.
PLANNING:- Is the process of establishing the organizations objectives and formulating / strategies, programmes, polices and standards needed to accomplished the set objectives (Onuona, 1991: 6).
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