The Impact Of Environmental Factors On Organizational Performance

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Environmental Factors On Organizational Performance


It has been argued that the success and effectiveness of an organization are not determined solely by the abilities and competencies of the employees and management alone, the environment also has profound effect on company operations. Based on these facts therefore, this research work was undertaken to analyze the impact of environmental factors on organizational performance using ABC Transport Company as the case study. In carrying out this work, 154 copies of the questionnaires were distributed to the company understudy, and to test the validity of the assumption, an hypothesis was formulated for this study.

The chi-square (X2) statistical tool was used the major finding of this work can be summarized as follows; organizational performance and organizational structure influences corporate performance of ABC Transport company. After the analysis, it was discoursed that the x2 test statistics is greater than the critical value leading to the rejection of Ho. In other, the alternative was accepted and it was concluded that “environmental factors has significant impact on organizational performance. Finally, it was recommended that the management of the company could perform their task effectively, by having a good and clear understanding of the environment variables, this will inturn increase productivity, thereby achieving its set objectives.

Chapter One


1.0 Background

The environment is a major source of uncertainty to a business manager and as such, it influences the design of any organization and the configuration of organizational structure (Akanwa, 200:59). Environment could also be regarded as a combination natural object ( living and non living things) made by human and the inter-relationship between them and various circumstance that surround people on earth (Ohazurikke 2003:59)

Business exists in an environment that consist of factors and forces that are external to the firm. In pursuance of its objective, an organization cannot achieve its objectives without interacting with other members of the environment. An organization and its environment are inter-dependent; the organization depends on its environment for the source and opportunities necessary for the sources and opportunity necessary for its existence.

Furthermore the environment determines the limits of the organization activities for example, the passing of a new law by government may make certain business in Nigeria either fold-up or join another line of business (Alugbo 2002:1). The environment sources of growth may therefore be internal or external. Both have impact on the organization.

A business can therefore be regard as an open adaptive system with its environment acting as a sepias system; such business must change volumes, material or energy within the environment, this the principal task of the manager is to design an internal environment for performance, he necessary do so within the strength of the enterprise, externals environments whether economic, technological, social political or either all Nigeria context (Awuto 1997, 265): it is positive when the outcome of the influence is favorable but become negative when the outcome of the influence is unfavorable (Ohazurike 2003:63).

However, the aim of this research is to find out the impact of environment factors on organizational performance how and to what extent can an environment influence the objective and goal of corporate organization, this study will at this point advise management to be efficiently informed and manage its environment in order to adapt to the changing climate so as to accomplish its set of objectives and goals.

1.1 Historical Background of the Study

Brief history of ABC transport Plc Associated Bus Company limited, operators of ABC transport commenced operations on Road passenger transportation on February 13, 1993 as an OFF-Shoot of ropido Venture with a view of running a modern road transport system in Nigeria.

In March 2003, capital Alliance private Equity (CAPE) acquired 30% shares of ABC transport with the acquisition; capital allowance (Nigeria) became stakeholder in ABC transport, a partnership that repositioned the company for greater performance. ABC transport operates Luxurious and mini bus services according to accepted international standard of road transportation, its services are specially designed for distinguished travelers who would other wise use services.

The operator within Nigeria is carried out in ultra modern terminal with comfortable luggage’s in various cities like Lagos (Jibawn and festac),Aba, Owerri, Port-Harcourt, Abuja, Enugu, Warri, Onitsha and Umuahia. ABC buses are dubbed with the company’s trademark the “Reindeer.

The choice of the reindeer as the company’s symbol was made after a careful study of the peculiarities of the animal which is strong, fast and moves in herbs. For the company’s remarkable achievement in transportation ABC transport was given the following awards.

  1. Comm. Service awards 1997-1998 rotary clubs.
  2. Development excellence award 2005 in transport
  3. Award for excellence as best Luxury bus operator for the year 200, 2003.
  4. Best security friendly/conscious land transport company award 2006/2007.
  5. West African transport services award 2007 by quality management development institute
  6. Transport of the year 2004 award by Lagos aviation and LogisticsCollege.

1.2 Statement of the Problem

With the dynamic changes in the society many organizations have in one way or the other been affected due to poor planning, perhaps not having good management team. Organization has to adapt to certain changes in the loess environment but still it will not avail.

Corporate organization who have failed to analysis and diagnose its external environment have suffered great losses that is in term of poor return on investment, poor patronage from customer, poor quality of product or service etc. therefore, due to the volatile nature of today’s business environment and the rapidity with which changes occurs, it comes imperative that for every organization to be successful. It has to monitor all the forces influencing its operating environment.

It is on tight of this that this study following problems associated with ABC. Government regulations influence organizational objectives.

  1. Lack of skilled labour does lead to poor environment scanning result.
  2. The company was able to render services that meet the need of customers and their services are in conformity with customer need, but customers do react negatively to sudden increases in the price of their service are in conformity with customer need, but customers do react negatively to sudden in creases in the price of their service.
  3. Political interference (instability) affects few level of patronage from customers.
  4. Competition from other firms (company) affects the company from increasing its market shares.

1.3 Research Objectives

This research will be guided by the following study objectives

1.3.1 General Objective

The general objective of this study is to assess the impact of working environment on organizational performance at the ABC Transport PLC in Imo state.

1.3.2 Specific Objectives
  1. To determine the contribution of performance feedback on organizational performance.
  2. To assess the use of job aid towards organizational performance.
  3. To determine whether physical environmental factors has influence on organizational performance.
  4. To examine whether supervisor support contribute towards organizational performance.

1.3 Research Questions

  1. How does performance feedback improve organizational performance?
  2. How can job aid enhance employees ‘performance?
  3. What are the physical environmental factors that add towards organizational performance?
  4. Which contribution does a supervisor has towards organizational performance?

1.4 Significance of the Study

According to Anyanwu (200 198) significance means the conveyance of meaning to specific people and groves. It is important to know that organization operates within an environment which directly or indirectly affects its result; the importance of business environment to organizational performance cannot be over stated.

Organization irrespective of how proper their program is articulated, they have to take cognizance of their environment. It is on this perspective that the significance of this work cannot be understand, hence it will be of benefit to the researcher, public.

The case study organization and management scholars in the following ways. This work will serve as a guide and reference purpose to the public and other researcher writhing on this topic.

The case study organization stands to get more benefit from researcher. This is because the research will be based directly on its activities and also help them especially the managers to know how to employ and manage the business environment effectively.

This study will also be useful to the academic development with business environment influences organizational performance and for this reason, will be very useful to the management scholars.

1.5 Scope of the Study

Anyanwu (200:1999) says that the scope of the study or its definitions is concerned with establishing of boundaries of the research. In other words, the scope tries to tell the reader where the study begins and where it ends.

The scope of the study covers the impact of environmental factors an organizational performance, there is no significant relationship between the company’s policy as part of internal factor of business environment in relation to its organization performance on ABC transport limited in Imo state.

1.6 Limitations of the Study

Fundamental problem were encountered in the course of this research, the researcher being very unwilling/restive in their response to the question and in most cases determines explanation before giving the answers.

The time period, with which this research was carried out, it is impossible to collect all the adequate data. The study was handicapped by inadequate fund, this therefore showed down the pace of the work.

1.7 Definition of Terms

Business Environment:

This refers to all elements both internal and external that impinges or which influences organization performance.


This is the ability of business organization in achieving its target.

Environment scanning:

These refer to the process of studying the environment in which the organization exists to pinpoint opportunities and threats.


These refers to a system in which two or more people work together in a structural way to achieve specified objective.

1.7 Organization of the Study

The study will be structured into five chapters.

  • Chapter one will deal with introduction, statement of research problem, research objectives and significance of the study.
  • Chapter two will consist of literature review which will comprise of conceptual definitions, theoretical review, empirical analysis and conceptual frame work.
  • Chapter three will contain the research methodology which comprise of the research design, study area, research population, sampling design, and data collection methods.
  • Chapter four will highlight the presentation and interpretation of data as well as discussing of findings.
  • Chapter five will contain the summary of the study, recommendations and conclusions.

Chapter Five

Summary, Conclusion and Recommendations

5.1 Introduction

This section contains the major findings that came out of the study and the conclusion drawn. It covers conclusion and recommendations areas for further study. The study investigated the impact of working environment on organizational performance of ABC Transport PLC in Imo state region. It sought to find out whether working environment can influence employee’s performance at the institute. Descriptive sample survey was used to carry out the study. This was because the study was intended to measure the respondents’ views about the issue. Sampling technique was respectively used to select the respondents for the study. In all, Fifty 50 respondents comprising Twenty Five (25) Junior staff and Twenty Five (25) Senior staff were involved in the study. The research instrument that was used in the data gathering was a questionnaire. To give direction to the study, the following research questions were asked, how does performance feedback improve organizational performance? How can job aid enhance organizational performance? What are the physical environmental factors that add towards organizational performance? Which contribution does a supervisor has towards organizational performance? The data gathered were analyzed using SPSS. It was found out that most factors that comprise workplace influence employee’s behavior. This is however the working environment affects the employee in one way or the other and employees play a very crucial role in an organization like ABC Transport PLC.

5.2 Summary of the Main Findings

The study revealed that the organization working environment had an impact on members as far as respondents are concerned. The study found that, the organization needs to improve its physical working environment so that to influence employees to stay in the office, work comfortable and perform their job. The study also revealed that employees are sometimes not recognized as individuals i.e. no feeling exist between them and the organization and this occasionally demoralize them as they cannot air their views. Through this study it revealed that organizational performance depended much on the presence of job aid at the organization. This means by having job aid it will support the employees to perform and plan for the development so that it can be used as to obtain the optimal use for performance. It was also found that, the organization to some extent has fairly treatment on rewarding employees who perform well. The study also revealed that employee’s will improve their performance if the problems identified during the research are tackled by the management. The problems are flexibility of working environment, work noise distraction, supervisor’s interpersonal relationship with subordinates, presence of job aid, the use of performance feedback and improve of work incentives in the organization so that to motivate employees to perform their job.

5.3 Implications of the Findings

In order to improve the performance, management can consult the employees before decision making to seek their suggestions. In order to rectify that the management has to encourage their employees to experiment new methods and try out creative ideas which will results a positive impact on their performance. The management has to organize more training and development programs for improving the performance of employees. Since most of the employees are not satisfied with the monetary benefits, the management has to consider this as a serious issue and try to give more salaries according to their years of experience as well as improving their physical working environment. The management has to look into the grievances and complaints of the employees on observable phenomena which are influenced by emotions or personal prejudices. Promotions have to be given according to their experiences and performance. The management must take an active role in not only defining the physical environment of the workplace and making it conducive for workers but also alter the management style to suit the employees. This refers to changing aspects like ethics, behaviour, commitment, professionalism, drive and interpersonal relations in employees for the better. Supervisors must reduce the tendency to micromanage and instead display that they have confidence in the ability of their team members and trusts them to do their work efficiently. If the supervisor treats his subordinates as professionals then there is no reason that they should not behave in that way. Such an attitude promotes trust and loyalty among the employees and encourages better teamwork among them. Besides, they develop a sense of ownership towards the organization. Creating a environmental factors in which employees are productive is essential to increased profits for organization, corporation or small business. Principals of management that dictate how, exactly, to maximize employee productivity center around two major areas of focus: personal motivation and the infrastructure of the environmental factors which have influence on organizational performance.

5.4 Conclusion

Working environment plays a vital role in motivating employees to perform their assigned job. Since money is not a sufficient motivator in encouraging the workplace performance required in today’s competitive business environment. The ability to attract, keep and motivate high-performance is becoming increasingly important in today’s competitive organizational environments. The study also revealed that employee’s will improve their performance if the problems identified during the research are tackled by the management. At the end of the research, it was realized that the employee’s working environment find themselves in affect their productivity greatly. Therefore it is the responsibilities of the organization to provide friendly working environment which will influence employees to work comfortable and perform their job.

5.5 Recommendations

Based on the results of findings, the following are recommendations for future implementation. Periodic meetings with employees to air their grievances to management to serve as a motivating factor to the employees. Managers should also be counseled on their relationships with their subordinates.

The organization should have a good program in place for their employees work life balance as this can be a great factor to motivate and retain them.

Management should try as much as possible to build a environmental factors that attracts, retain and motivate its employees so that to help them work comfortable and increase organization productivity.

Employers should make available adjustable and flexible furniture to all workers in order to make them more comfortable. This in the long run keeps the employees healthy.

Employers should have in place a good working condition for their employees in order to boost their morale and made them more efficient. An example is making their benefit programs to suit employees.

Management should find ways and means of communicating their goals and strategies to their employees in order to achieve what the organization is in business for, its mission and vision.

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