Effects Of Globalization On The Development Of Domestic Manufacturing Industries In Nigeria (A Study Of Dangote Flour Mill Plc)
This study examines the effects of globalization on domestic manufacturing industries in Nigeria using Dangote Flour Mill Plc as case study; It adopted a survey research design to elicit data. 65 employees of Dangote Flour Mill Plc were selected using scientific sampling technique. Questionnaire was used as the instrument for data collection and the collected data were statistically analysed using the simple percentage, and chi- square non parametric technique of hypothesis testing. The analysis was carried out using statistical Package of Social – Sciences (SPSS) as a tool. All the hypotheses tested were rejected. The finding revealed that globalization has impact on the performance of domestic manufacturing industries in Nigeria and also the development .of domestic manufacturing industry has effect on prices on goods and services. Finally, the study ubmitted that globalization positively affect the performance of domestic manufacturing industries. Therefore, the domestic manufacturing industries in Nigeria should embrace the benefit that comes with globalization.
Table Of Contents
- Table of Content
- 1.1 Background of the study
- 1.2 Statement of the problem
- 1.3 Objective of the study
- 1.4 Research Questions
- 1.5 Research Hypotheses
- 1.6 Significance of the study
- 1.7 Scope of the study
- 1.8 Definition of terms
- 1.9 Historical Background of the study
- 2.1 Introduction
- 2.2 Conceptual framework
- 2.3 The impact of globalization on the manufacturing sector in Nigeria
- 2.4 Forces of globalization
- 2.5 Challenges for Nigeria
- 2.6 Theoretical framework
- 2.7 Summary of the chapter
- 3.1 Introduction
- 3.2 Research design
- 3.3 Population ofthe study
- 3.4 Sample and sampling technology
- 3.5 Data collection method
- 3.6 Data collection instrument and its administration
- 3.7 Validity and reliability of the instrument
- 3.8 Techniques of data analysis
- 3.9 Limitations of the study
Data Presentation and Analysis
- 4.1 Introduction
- 4.2 Data presentation and analysis according to research question
- 4.3 Data presentation and analysis according to research question
- 4.4 Discussion of Findings
Summary, Conclusion and Recommendations
- 5.0 Introduction
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
- 5.4 Suggestion for further studies
1.1 Background to the Study
Globalization could simply be described as the integration of national economies through trade investment and financial interaction. The concept of globalization began to thrive shortly after the end of Second World War when the allies led by the united State decided to support a world wide open trading and investment system. The collapse of the Soviet Union, the fall of the Berlin wall and anti-climatic end of the cold war aided the emergence of the ascendancy of the globalization trend. This resulted in the hurried marketization and democratization of the former soviet states of Eastern Europe and selective absorption into mainstream western Alliance system of the hitherto to communist States. Beyond this however, globalization aided by supersonic transformation in information technology integrated the world through push of free market economy as well as liberal democracy. (Olaleye, 2002).
Globalization has increased the volume of trade by the developing nations in general and that of Nigeria in particular. The continuous growth in. imports and exports is seen as evidence that countries are becoming independent on global markets.
Globalization has also brought about revelation, in technology. In fact one of the propelling agents is technology. There have been developments of new and improved method of doing traditional things otherwise called technological progress. The Banking sector more than any other sector is the hardest hit (Olajide, 2002).
1.2 Statement of the Problem
There is wide spread of trade around the globe thereby increasing the level of competition in the manufacturing industry globally. The domestic manufacturing industry in Nigeria is faced with the problem of competing with the developed countries who through globalization continue to improve and advance on daily basis in innovation and in information technology. The technological environments are moving at supersonic speed, Computers, Telephones, Televisions and wireless forms of communication now are merging into telecommunication both to create multimedia products and allow individuals in the developed world to communicate with others, hereby improving manpower skills, improving in method of production, efficiency and effectiveness of business organization. Globalization has helped these developed countries to achieve quality, quantity, price, durability, manpower skill, and etc. If the domestic manufacturing industries fails to heed the lessons of globalization it will be gradually whipped into line by the forces unleashed by globalization.
Therefore, it is upon this premise that a study of this nature is necessary in order to identify the effect of all afore mentioned factors on the development of domestic manufacturing industries in order for them to be able to compete globally.
1.3 Objectives of the Study
The main objective of this study is to examine the effect of globalization on the development of domestic manufacturing industry with Dangote Flour Mills PLC as a focus. This, in order to achieve the above objectives, the following specific objectives will be our guide.
- To examine whether the development of domestic manufacturing industries have effect on prices of goods and services?
- To examine whether increase in the level of competition with globalization have effect on prices of goods and service?
- To examine whether organization output’ in, domestic manufacturing industry affect price?
- To examine whether quality plays a role in the acceptability of goods and services of domestic manufacturing companies globally?
1.4 Research Questions
In order to achieve the objectives of this study, the following are the research questions:
- Does the development of domestic manufacturing industries have effect on prices of goods and services?
- Does increase in the level of competition with globalization have effect on prices of goods and service?
- To what extent does organization output in domestic manufacturing industry affect price?
- To what extent does quality plays in the acceptability of goods and services of the domestic manufacturing companies globally?
1.5 Research Hypotheses
To provide, answers to the research-questions the following hypotheses will be tested.
- Globalization has impact on the performance of domestic manufacturing industries in Nigeria.
- The development of domestic manufacturing industries has effect on prices of goods and services.
1.6 Significance of the Study
A study of this kind is expected to make theoretical and practical contributions to manufacturing companies in Nigeria. Thus, Nigeria is the most populous black nation in the world and the effect of globalization on the country could be generalized for other countries in the sub-Sahara Africa, so the effect of globalization process on Nigeria has a determinant effect on other countries in Africa.
Also, it is hoped that this stud’ will provide manufacturing companies an incite on how organizations, can cope in the ever-changing, turbulent business environment in developing countries and how organization activities can be organized in order to cope effectively with opportunities and trend in the business environment.
Also, how to overcome industrial or economic recession changes in social variables increase competition and technological advancement. In addition, it is hoped that this study will help the policy makers to see need to invest more in technology in a nation like Nigeria that encourages small and medium enterprises scale (SMEs).
This study is also expected to prove to scholars and imminent researchers, that it is possible to manufacture quality product in a developing nation like Nigeria with Globalization.
Furthermore, for Business administration student who aspires to become Managers manufacturing industries, itis expected that this study win expose them on how products can be advertised and distributed in the global village without stress and with less cost, thanks to globalization
1.7 Scope and Limitations of the Study
The basic premise on which this study is based is the effect of globalization on the development of domestic manufacturing industries in Nigeria with DangoteFlour Mills Plc as a case study. The study covers representative numbers of the generality of the workers in the organization. No special consolidation is given to sex, age and Nationality in collecting data from the respondents.
The first set-back encountered in the course of carrying out this research is the time limitation. The Nigeria academic environment has been largely infected by irregularities and uncertainties and as such abnormal academic calendar.
Another key limitation was that of finance. Since I do not have a computer system. of my own I haveto pay to get the research work typed out. Furthermore the fear of insincere response on the part of the respondents even when a questionnaire is administered on them.
1.8 Definition of Basic Terms
Globalization could simply be described as the integration of national economies through trade investment and financial interaction
A manufacturing industry is an industry where goods are produced and they prepare what is known as manufacturing account. A manufacturing account is basically a list of cost relating to the production of goods (i.e. factory relation expenses).
Is a process of improving the economy of a country by increasing the amount ofbusiness activities.
It is a process of using advanced scientific mechanism in an industry to improve it productivity.
All the people who are available to do a particular job or to work in a particular place.
Is the art and science of getting done through other people using both human and non-human resources.
The degree of efficiency and effectiveness with which organizational objectives are achieved. Thus efficiency and effectiveness are the determinants of performance in the study.
The unified comprehensive plan that the enterprise develops to achieve its objective.
This is any commercial undertake that is either publicly owned orcontrolled. The word is used interchangeably with organization in this study.
Is an association of a number of person carrying on business for the purpose of a monetary gain, although there are other companies that are deliberately non-profit making.
This is the sum total of the physical and potentially relevant to the organization goals setting and goal attainment which are taken directly into consideration by members of the organization when making business decision and plans.
1.9 Historical Background of the Case Study:
Dangote Flour Mills Plc commenced operations in 1999, as a division of Dangote industries limited. One of Nigeria’s largest and fastest growing conglomerates. Following the strategic decision of DIL unbundled its various operation, Dangote flour Mills Plc was incorporated in January, 2006. The restructuring was completed in January, 2006 when the federal High court sanctioned a scheme of arrangement where in all the assets, liabilities and undertakings of the erstwhile Flour division of OIL were transferred to Dangote Flour Mills Plc. From an initial installed capacity of 500 MT per day at its Apapa mill, Dangote flour has expanded rapidly by opening in quick successions, Three other flour mills in Kano (2000), Calabar (2001) and installed capacity of 5000 MT per day but three of them were subsequently expanded resulting in a total installed capacity 5000MT per day distributed as follows:
- Apapa – 1000 MT per day
- Kano – 1500 MT per day
- Calabar – 1000 Mt per day
- Ilorin – 500 MT per day
These expansions were in response to a growing national demand for the flour and flour based products in addition to the company’s drive for increased market share. Thus from a modest beginning, the company has grown to become one of the industry leaders within a six year period.
The company has 2 wholly owned subsidiaries, namely
- Dangote Agro sacks limited
- Dangote paste Limited
In line with DIL’s business philosophy of establishing a document presence in any sector it operate in these subsidiaries occupy leadership position in their respective industries.
The company is in the business of flour milling, processing and marketing of branded flour its product portfolio comprises of the following:
- Bread flour
- Pasta semolina and
- Wheat offal’s (bran’s)
Flour Milling Technology and Process Technology
In order to transform wheat into high quality flour the deployment of state of art plant and equipment as well as technical expertise is critical DFM’s mills across the country equipped with the latest flour milling technology available in the world. All mills were purchased installed and commissioned by world renewed milling equipment supplies. The butter Group of Switzerland (Buhler)
Dangote Flour·Mills Group Overview
Despite the fierce competition, DFM remains a significant player in the flour milling and associated products industry.
Dangote Flour Mills Plc was incorporated in, 2003 with its registered office at 8 Rycroft Road, off Liverpool Road, Apapa, Lagos.
Dangote flour mills PLC entered into management and technical services agreement dated 2nd January, 2006 with Dil. The Agreement is for an initial period of 5 years subject to termination by either party in accordance with the terms of the agreement.
Summary, Conclusion and Recommendations
This chapter is aimed at giving a general summary of all that has been discussed earlier in the study. Conclusion and recommendation will be made and if need be the researcher will make suggestion for further study.
5.1 Summary of the Study
In the wake of fierce competition that exist within Nigeria business sector and the global village at large in recent time only organisation that is involved .in globalization that are likely to survive. According to NCEMA (2002) Globalization involves widening and intensification of links between the economies of the industrial and developing countries through trade, finance, investment, technology and migration. Therefore, there is need for domestic manufacturing industries to embrace globalization as a tool for development.
For the purpose of assessing the need for globalization the researcher divided this project into five chapters.
In Chapter one, introduction was made to text the objective of the study which is assessing on the effect of globalization on domestic manufacturing industries in Nigeria. The researcher also stated the hypotheses to be tested in the study. In the chapter two, he exhaustively reviews various literatures on globalization. In the chapter three the methodology of the study was also discussed. This comprised vital parts such as the research design and the method of data analyses. Here the researcher made use of SPSS (Statistical Package for Social-Sciences) as a tool.
In chapter four, two hypotheses stated in the study were tested. The findings from the hypotheses were: Globalization has impact on the performance of domestics manufacturing industries in Nigeria; the development of domestic manufacturing industries has effect on prices of goods and services. From the above findings, the researcher concludes thus:
There is wide spread of trade around the globe thereby increasing the level of competition in the manufacturing industries globally. The domestic manufacturing industries are faced with the problem of competing withthe developed countries who through globalization continue to improve and advance on daily basis in innovation and information technology. Globalization has helped the developed countries to achieve quality, quantity price, durability, manpower skill and etc. Therefore the researcher strongly agrees with Olaleye (2002) that if the domestic manufacturing industries fails to heed the lesson of globalization it will gradually whipped into line by forces unleashed by globalization.
The recommendations made by this researcher are as follows:
There is need for all organization in the domestic manufacturing industry to embark on a radical transformation programme that will not only make them relevant but also make them take advantage of the best element of these forces of change in globalization.
Government must identify the challenge to economic development and motivate the society towards providing these needs in a sustainable industrialization process; it must also meet the needs of the global economy adhering to its principles and rules (Ibrahim, 2008).
Government should be able to meet the needs that fosters globalization i.e PHCN constant supply of power, provide easy affordable access to the internet etc before liberalizing it economy to protect the infant or domestic industries. According to Mkandawire and Soludo (1999) is that some protection or subsidization of the infant industry would be required initially before exposing it to international competition.
Since there is supersonic transformation of technology, there is need for the domestic to be updated with the new ideas innovations and changes that comes with it. Domestic industries should not find it difficult to set aside old ways of production. According to Ihovbere (1996) for Nigeria and indeed Africa to be an effective actor in the new globalization major structural change must be put in place. The stating point should be a drastic deconstruction and reconstruction of the repressive and exploitative, neo-colonial state.
Finally, it must be stressed that given the nature and character of the Nigerian State with its inherent weak domestic base, globalization certainly has its adverse implications on the Nation’s economy. However, in order to minimize the negative effects and harness whatever benefits of the current growing overwhelming globalization trend, there is the necessity for a complete restructuring and transformation of the Nigeria political economy.
5.4 Suggestions for Further Studies
For further studies to be enriched, respondents should be encourage to respond to the individual questions and they should be educated on the importance of conducting research of this nature and that any information elicit from them will never be used against them instead it will be used to advance the course of the research.
Apart from the above, researchers should make use of publicity like tea-shirts with the Institutions name tags on it, ID Cards and an authorization letter from the project supervisor indicating the authenticity of the research.
In addition related journal and textbooks should be reviewed in order to improve on the outcome of further studies.
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