Succession planning in small and medium scale enterprises’ (smes) sustainability in uyo municipality, akwa ibom state
Table Of Contents
Title page
Declaration – – – – – – – ii
Certification – – – – – – – iii
Dedication – – – – – – – iv
Acknowledgements – – – – – – v
Abstract – – – – – – – vi
Table of Contents – – – – – – vii
List of tables – – – – – – viii
Chapter ONE
: INTRODUCITON
1.1
Background of the Study – – – – – 1
1.2
Statement of the Problem – – – – – 3
1.3
Objectives of the Study – – – – – 5
1.4
Research Questions – – – – – – 5
1.5
Hypothesis of
the study – – – – – 6
1.6
Significance of the Study – – – – – 6
1.7
Scope and Limitations of the Study – – – – 7
1.8
Operational Definition of Terms – – – – 7
1.9
Organization of the Study – – – – – 8
Chapter TWO
: REVIEW OF RELATED LITERATURE
2.1 Conceptual
Framework – – – – – 9
2.1.1 Scope of Small
and Medium Scale
Enterprises (SMEs)- – – – – – 15
2.1.2 Problems Associated with SMEs – – – – 16
2.1.3 The Role of
SMEs in the Growth of the
Nigerian Economy – – – – – 19
2.1.4 Significance
of the SMEs Sub-sector in the
Nigerian Economy – – – – – 21
2.1.5 Succession Planning – – – – – – 24
2.1.6 Job Rotation – – – – – – – 30
2.1.7 Benefits of Job Rotation- – – – – 34
2.1.8 Mentoring – – – – – – – 38
2.2 Some
Theories of Entrepreneurship – – – 41
2.2.1 Max Webber’s Theory – – – – – 41
2.2.2 Schumpeterian Theory of Entrepreneurship – – – 42
2.2.3 Everett Hagan’s Theory – – – – 44
2.3 Empirical
Framework – – – – 45
Chapter THREE
: RESEARCH METHOD
3.1 Research Design – – – – 49
3.2 Population of the study – – – – – 49
3.3 Determination of Sample Size – – – 50
3.4 Sampling Technique- – – – – – 51
3.5 Sources of Data – – – – – 51
3.6 Research Instrument – – – – – 52
3.7 Validity Test of the Research Instrument – – 52
3.8 Reliability Test of the Research
Instrument – – 52
3.9 Administration of the Instrument – – – 53
3.10 Scoring the Instrument – – – – 53
3.11 Method of Date Analysis – – – – 54
Chapter FOUR
: DATA PRESENTATION,
ANALYSIS AND DISCUSSION OF FINDINGS
4.1 Presentation
of Data – – – – 55
4.2 Testing
of Hypotheses – – – – – 59
4.2.1 Hypothesis One `- – – – – 59
4.2.2 Hypothesis Two — – – – – – 61
4.2.3 Hypothesis Three – – – – – – 62
4.3 Discussion
of Findings – – – – – 64
Chapter FIVE
: SUMMARY OF FINDINGS, CONCLUSION
AND RECOMMENDATIONS
5.1 Summary
of Findings – – – – – 66
5.2 Conclusion – – – – – – 67
5.3 Recommendations
– – – – –
68 References – – – – – – 69
Appendices – – – – – 75
LIST OF TABLES
Table 3.1: Distribution of staff population
according to
organizations – – – – – – 50
Table 3.2: Distribution of staff sample
according to
organizations – – – – – 51
Table: 4.1: Number of
questionnaires administered
and returned – – – – – 55
Table 4.2: Sex distribution of
the respondents – – 55
Table 4.3: Age distribution of
the respondents – – 56
Table 4.4: Respondents’ Working
Experience – – 56
Table 4.5: Percentage analysis of
the responses to
job rotation dimensions – – – – 57
Table 4.6: Percentage analysis of
the responses to
mentoring dimensions – – – – 58
Table 4.7: Percentage analysis of
the responses to
sustainability of SMEs
questions – – – 59
Table 4.8: Regression analysis
result on mentoring and
sustainability
of SMEs – – – – 60
Table 4.9: Regression analysis
result on job rotation and
sustainability of SMEs – – – – 61
Table 4.10: Regression Analysis for Joint Effect of
mentoring, Job rotation and
SMEs sustainability- 63
Thesis Abstract
This study,
Succession Planning and SMEs Sustainability in Uyo Municipality of Akwa
Ibom State, was designed to
underscore the relationship between succession planning and SMEs
sustainability. Specifically,
the study is designed to establish the relationship between mentoring and the
sustainability of the SMEs in Uyo municipality; assess the relationship between
job rotation and the sustainability of SMEs in Uyo municipality; and determine
the joint relationship between mentoring, job rotation and the sustainability
of SMEs in Uyo municipality. The survey research design was adopted in this
study. The population for this study was made up 102 staff. They
consisted of all senior staffers of the selected SMEs in the service industry. Descriptive and inferential statistics
was used in analyzing the data of the study. Findings from the results of
analysis indicates that both proxies for succession plan (i.e. mentoring and
job rotation) have significant relationship with SMEs sustainability in Uyo
Municipality, Akwa Ibom State.
The multiple regression analysis also reveals that, jointly they significantly
predict SMEs sustainability in Uyo Municipality, Akwa Ibom State. Based on the findings of this study,
it was concluded that succession plan significantly affect
sustainability of SMEs. Consequently,
it was recommended that SMEs owners should put in place mentorship
programmes to aid the sustainability of the enterprise; and that management of
SMEs should practice the concept of job rotation by moving employees from one
job to the other or from one unit/department to another as this will give them
all-round knowledge of how the organization works.
Thesis Overview
INTRODUCTION
In modern day’s businesses,
succession planning is used as a proactive attempt in ensuring a smooth
transition of business from owner to a successor through effective manpower
training. It involves formulating a forward looking plan to ensure the
necessary human effort to make it possible for the survival and growth of the organization.
Thus, lack of proper succession planning can have the direct effect of causing
the collapse of these businesses especially when owners leave the business upon
retirement or by death.
Ayyagari,
Beck and Demirguc-Kunt (2007) opine that businesses that continue to succeed
despite the departure of strategic leaders are those that prepare in advance.
They have key players in place and they have implemented well-defined,
comprehensive development programs, formal management training programs, and
succession plans. Developing a comprehensive, long-term succession plan is a
critical element for survival of the small scale enterprises. Having the best
people in pivotal leadership roles, prepared to step in at any time, is
essential for future success.
Succession planning can be
defined as the process of identifying and preparing suitable employees through
mentoring, training and job rotation, to replace key players within an
organization. Those key players sometimes leave their positions for whatever
reasons such as retirement, advancement and attrition (Rodrigo, 2013). Small
and Medium scale Enterprises (SMEs) is a component of entrepreneurship
development and important aspect of economic development and economic
transformation offering jobs and creating wealth for families and other people
working in SMEs (Ward, 2003). Today’s
organizations are facing higher demands in a global market owing to widening
talent gap. One of the major concern that every SMEs owner face is how to
effect an orderly and affordable succession of the business while ensuring that
the business will provide for the future needs of the owner and his or her
family and keep them comfortable during their retirement years (Rodrigo, 2013).
While 74% of individually owned companies are investing in a formalized
succession planning process, companies still struggle to fill talent pipelines.
In an ideal world, individual owned companies endeavour to “grow leaders”
within their own organization, ensuring that there is continuity for the future
of their leadership and reducing turnover (Miller, 2012).
In the Nigerian context, SMEs are renowned for
their entrepreneurial and innovative spirit and are a key driver for the
Nigerian economy. Individually-owned companies face unique challenges in
Nigeria’s very turbulent business environment. The issues gravitate around
ownership and rewards, communication, conflict, pay and benefits, engagement of
individual members and succession planning (Weweru, Bjuggren and Sund, 2001).
Succession planning is a key element of an
effective strategy for managing talent and ensuring that an organization
achieves its future goals. In Nigeria, it is alleged that succession planning
in the public sector has been more formalized than in the private sector.
Similarly, there has been a lack of focus on succession planning in non-profit
organizations, although the need there is just as pressing (Murangiri,
2011).
Succession
planning is an activity that most organizations, especially SMEs, would be
quick to say is in place. Unfortunately, it is widely known that succession
planning efforts are all too often underdeveloped, unevenly executed, and
sometimes simply ignored (Miles and Dysart, 2007). SMEs exist on a global
scale. In Nigeria alone, eighty to ninety percent of all business enterprises
are individually owned (Weweru, Bjuggren and Sund 2001). The perpetuity problem
with the individually owned businesses may be attributed to the lack of
strategic succession planning.
Currently,
there are a few individually owned businesses in Nigeria that have survived to
the third and fourth generation. The literature on SMEs suggest that there are
a number of SMEs that fail in transitioning from the first generation to the
second generations. SMEs lack a practical understanding of succession planning
resulting in the implementation of weak succession plans. A study on succession
in the individual firm indicates that when members work together, emotions may
interfere with business decisions.
Small and
medium scales enterprises occupy an important place in any economy. The rate of
failure of small and medium scale enterprises in the Nigerian economy has been
of great concern to all and sundry. One of the reasons for the failure of small
and medium scale enterprises in Uyo municipality is the lack of succession
planning. Despite the role of the small and medium scale enterprises as a
catalyst for economic growth and development, it is discovered that when
owners/managers of these businesses died, less than one-third of the business
are able to continue to the next generation. In light of this, planning for a
successful succession is a crucial goal for every small and medium scale
enterprises, this is because without it, the firm cannot survive let alone
sustain to the next generation.
It is in
this regard that the ultimate objective of the study is to examine succession
planning and SMEs sustainability in Uyo Municipality of Akwa Ibom State.
The main objective of this study is to
assess the relationship between succession planning and sustainability of Small
and Medium Scale Enterprise (SMEs) in Uyo municipality of Akwa Ibom State.
Specific Objectives are to:
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