The Impact Of Business Environment On Management Decision

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Business Environment On Management Decision


This project work is on the “impact of Business Environment on Management Decision” a case Study of First City Monument Bank Plc. This seems not to apparently clear to most people but the research has therefore attempt to time out for effectiveness and efficiency, relevant information was gathered through the primary and secondary source of data collection such as journals, pamphlets, magazines, etc. to enhance the scope of the topic, the topic was therefore divided into five chapters which on literature review of the past author, chapter three deals on the method employed in carrying out the research such as the population, sample research instrument and chapter four which deals on the explanatory survey design in conjunction with self formulated question in the questionnaire, simple percentage method and chi-square. The statistical tools were to collect information analyze the data on presentation as analysis such as introduction, presentation of results, hypothesis testing, finding and discussion. Then the last part, chapter five is all about the summary of the project, conclusion and recommendation.

Chapter One


1.1 Background of the Study

Environment of a firm consists of all group and institution that have an actual or potential influence on the organization and its ability to achieve its objective. Business environment comprises the large number of factor in a organization and in the outside world that can influence the work or managers (Oyedijo, 2002). The business environment includes customers, competitor, government regulatory agency, legal and political frame work and institution, technology development and social culture factors that influence business behavior. Management of a firm work their decision within those environmental force because any neglect of these factors can cause a lot of damage to the political environment that affect all forces of organization. Therefore, for the firm management to make effective and efficient decision that will help to achieve its missions and strategies of the firm, they must look into internal and external environment. The environment forces are divided into two which are internal and external environment. For internal influencing management decision, the internal environmental force to the firm under study include the (F.C.M.B), its employee and shareholder forces the external, the tax environment consist of the customers, competitors suppliers and human resource/labor market and government agencies, the needs of the people and for making profit. (Obasan 2001:2) for a business to exist, such business is carried out. Therefore management decisions are depended on its firm environmental force influence.

1.2 Statement Of The Problem

This study is designed to investigate the critical relationship between management decisions and environment forces. The environment force play an important role in an organizational existence, these environmental forces virtually influence every aspect of the organization. Management decision may be made based on improper assessment of the environment. For this reason, problem that could arise and needed to be assessed are as follows;

  1. The influence of the environment in the performance of the organization
  2. The influence of the environment on the laws that govern the organization or business
  3. The influence of the environment or the interest of the buyer and seller of the organization or business
  4. The influence of the environment decision making of the organization or business.
  5. The relationship between the organization environment and its goal.

1.3 Statement of the Objective

The general objective of the study is to examine the influence of business environment on management decision in Nigeria firm with particular reference to F.C.M.B Olipanu.

The specific objective includes;

  1. To reveal environmental the effect of environmental forces on the performance of the organization
  2. To determine the effect of the environment of force on management decision.

1.4 Statement of Hypothesis

Hypothesis 1
  • Ho: Business environment does not have sufficient impact on management decision.
  • H1: Business environment have sufficient impact on management decision.
Hypothesis 2
  • Ho: The environmental force has no effect on the organizational performance
  • H1: The environmental force has effect on the organizational performance

1.5 Significance of the Study

The study was carried out to highlight the important roles the environment plays in the survival of firms, organization and public corporation that aid users of the research findings and their benefit are as follows;

  1. The private and public companies shall benefit from this study by learning, when to and how to respond to this environmental forces in their decision in line with the direction setting.
  2. The management of all enterprises shall benefit from this study by learning more important the environmental forces, and before taking decision.
  3. This will also enable the share holders to learn so many environmental forces that can influence the decision of the management on wealth i.e. where the management retains shareholders divided for major reasons, may be tax imposed for such period was high. This will affect the return on capital of shareholders.
  4. Emergency entrepreneur, real entrepreneur and entrepreneur would find this interesting in the aspect of being exposed to aggregate environmental forces that influence the business and how to exploit various managerial decisions.

1.6 Scope and Limitation of the Study

The study will be carried out in a service rendering for, First City Monument Bank (F.C.M.B) in Olipanu Lagos State. This bank is one of the organizations that are equipped with all the features of a well organized industry in the locality. The resource of the staff to the questionnaire is quite low but for the help of the staff, it was successful. The study covers all existing environmental force of the industry within its totality. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.7 Definition of Terms


This is the activity that involves the sum of total of production and marketing of goods and services for the purpose of satisfying the need of people and for making profit.

Business Environment:

This comprise the large number of factors in the organization and in the outside world that can influence the work of the manager, this include customers, competitors, government, regulatory agencies, etc.


This is a step which is taken the conclusion of statement made in other to achieve a specific goal.

Decision Making:

Refer to those steps include technique in arriving at a choice between or among alternative actions.


This means a way of controlling and organizing a business or similar organization. It is also a process of getting things done through people.

Management Decision:

These are steps taken by the manager which will affect the overall performance of the organization.


These are settings in which a business is carried out and organized.

Environment Force:

These include those things that can influence on environment which include internal and external force.

Internal Environment:

These consist of the force inside the organization in which managers must function with.

General Environment:

These consist of broad forces which affects the surrounding of the organization.

Task Environment:

These consist of specific organization or groups that influence an organization; e.g. resource, government agencies, etc.


This is the location of the case study (Onipanu).


Is a general expression of the overall purpose of the organization.


This is a person who coordinates all other factors of production and aim at satisfying the needs of customers (Lillian and Yeside 2009)

Real Entrepreneur:

Is a person who initiates a business himself into the market i.e. an individual actor in the market.

Qvasi Entrepreneur:

This is a person who uses another person’s idea to develop his own business.

Emergency Entrepreneur:

Are those that exist offer right simple because they have connections with the corridor of power by using public funds to buy or establish business.

Return On Capital:

This is the yard stick employed to measure the efficiency of the management in utilizing the assets of the business.

Strategy Intent/Vision:

This is the desire feature state or inspiration of the organization.

Strategic Planning:

Is a sequence of analytical and evaluate procedure to formulate an intended strategy and the means of implanting it.

Buyers Of Business:

These are those who enjoy the goods produced and services rendered by an organization.

Sellers Of Business:

These are those who sell goods and also render service to the buyers.


These are those who carry out the same type of business in the same location.

Government Agencies:

These are those who collect tax from business organization on behalf of the government. These taxes are collected from the employer and employee.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the impact of business environment on management decision. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of the business environment on management decision

5.2 Summary

This study was on the impact of business environment on management decision. Three objectives were raised which included: To reveal the effect of environmental forces on the performance of the organization, to determine the effect of the environment of force on management decision, to ascertain the influence of the environment on the interest of the buyer and seller of the organization or business. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of FCMB Olipanu, Lagos state. The researcher used questionnaires as the instrument for the data collection.

Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource management, accountants, customer care officers and marketers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

5.3 Conclusion

This study focus on the impact of business environment on organizational performance, it is important for the management to check the relationship between the workers; employees and their customers. In the absences of good infrastructures, the productivity level could be affected and it may also hinder the performance of the workers. There is need for motivation on the part of employees. However, it is necessary to consider the effect of the research on FCMB of Nigeria as the sample or case study.

The conclusion gathered from the study is that:

  1. Environmental factors, which are the basic problems which business faces, should be well tacked. It will help to build the relationship between the management, workers and customers.
  2. From the analysis made in the study, it will be suitable to improve on management level, worker welfare, consider government policies, well trained or educated and finally improve on the technological equipment used for business.
  3. This research will help in adding to knowledge of people in business. People could use some analysis/techniques in the research to solve certain problems they might face in their business.
  4. knowing that business effectiveness cannot be ascertain, the research will help the company to ascertain or achieve effective performance, through the use of some of the techniques.
  5. The research has shown that there is a relationship between business and environment.

5.4 Recommendation

In order to reduce uncertainty in the environment, the following recommendations are therefore suggested:-

  1. The company should improve on their motivational level, since it is obvious that rewards tend to increase the performance of workers. The management should try to make their workers comfortable.
  2. Manager should be properly trained, so as to enable good supervision of their employee’s job. The manager tends to have the ability to control, plan and organize his or her company, when they are well trained for the task.
  3. The management should remember to give benefits to workers who are entitled to it; it will encourage the workers to take their job as important as possible. The management should also decentralize power or authority; they should learn to listen to workers opinion because it allows for cordial relationship.
  4. Finally, the organization should learn to consider government policies or regulations. This will help to build the business since profit margin of the company will not be hindered by the regulation.

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