World Journal of Management and Behavioral Studies 3 (1): 09-20, 2015

ISSN 2306-840X
© IDOSI Publications, 2015
DOI: 10.5829/idosi.wjmbs.2015.3.1.1315

Effect of Strategy Formulation on Organizational Performance:

A Study of Innoson Manufacturing Company Ltd Emene, Enugu
1
Nnamani Emeka, 2E.P. Ejim and 3Ozobu Amaka

Department of Business Administration,

1

Enugu State University of Science and Technology, (ESUT) Enugu, Nigeria

2
Department of Business Administration,
Institute of Management and Technology, (IMT) Enugu, Nigeria
3
Faculty of Law, Enugu State University of Science and Technology, (ESUT) Enugu, Nigeria

Abstract: The study investigated the Effect of Strategy formulation on organizational performance: a study of
INNOSON MANUFACTURING COMPANY LTD EMENE, ENUGU. The objectives of the study include among
others to find out the extent of the relationship between strategy formulation and organizational structure and
also to examine the effect of strategy formulation on workers behaviours at (INNOSON MANUFACTURING
COMPANY LTD EMENE, ENUGU), the researcher adopted survey research. A total sample size of 100 was
obtained from a total population of 185 workers using the freund and Williams formular. The main instrument
was questionnaire. The study used descriptive statistics to answer the questions posed for it. The parametric
tests method (T-test statistical technical and non parametric test method (chi – square (x2) were used to test the
three hypothesis that guided the study. The study revealed that a well conceived and formulated strategy
matched with appropriate structure increases productivity in the organization and secondly, that behavioural
and systematic resistance to strategic changes render formulation ineffective. Against these background
therefore, the researcher concluded and recommended that (1) Top management should take more responsibility
in reducing uncertainties by improving performance for the organization through strategy formulation by this,
they can gain back their customers through product line diversification strategy and strategic technological
changes, o be in tune with the Current Consumption patter in the Manufacturing Industry in Nigeria (2)
Management should reduce behavioral and systematic resistance to strategic changes through appropriate
organization structure and that workers should also be well informed on the reasons for the changes.

Key words: Strategy Formulation Organization Performance

INTRODUCTION is synonymous with grand plan. This is a situation where

the military makes an arrangement in combat, such that
The world economic growth and development are adversary might not take them by surprise. This is to say
changing rapidly and this change is characterized by that strategy has a competitive implication. Today,
such phenomena as the globalization, changing customer strategy is a concept used to denote a general programme
and investors demand, ever increasing product-market of actions of an enterprise in a bid to achieve its
competition etc. To compete successfully in this objectives. Strategy is the determination of basic long
environment, business organizations in this environment term goals and objectives of an enterprise and the
need to improve their performances by reducing cost, adoption of course of action and allocation of resources
innovating products and process, improving quality, necessary to carry out these goals [1]. Therefore strategy
productivity and speed to market. Therefore, the issue of can be viewed as the process of deciding what will
strategy formulation is very vital for organizations to constitute the objectives of an organization, the changes
experience such positive performance. The word strategy that are expected in the objectives, the resources that are

Corresponding Author: Nnamani Emeka, Department of Business Administration,

Enugu State University of Science and Technology, (ESUT) Enugu, Nigeria.
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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

expected to be used in other to achieve the objectives and strategic framework must also address fundamental issues
the polices that will govern the acquisition, use and such as resource base, infrastructure constrains,
disposition of the resources. Strategy can be defined as appropriate level of technology and raw materials input.
the broad programmes for defining and achieving an This paper focused on the effects of strategy
organization’s objectives as well as organization’s formulation in organizational growth and development
response to its environment over time [2]. Strategy is using INNOSON Nigeria Manufacturing Company Ltd,
broad programmes of activity to achieve organizational Emene Enugu as a case study.
objectives [3]. They are guide as to how resources are to
be deployed to achieve the objectives. They can be Statement of the Problem: Past and recent research
defined as the adoption of courses of actions and the studies have made it clear that there is an increased
allocation of resources necessary for carrying out these internal and external uncertainty due to emerging
goals. It is a unified, comprehensive and integrated plan opportunities and threats, lack of the awareness of needs
designed to ensure that the basic objectives of the and of the facilities related issues and environment and
organization is achieved. This is to say that strategy lack of direction. Organizations caught off guard may
involves rational planning. The question is, what is spend a great deal of time and energy playing catch up.
rational planning? Any organization that is result oriented They use up their energy coping with immediate problems
needs to ask the question “what do we want to become”? with little energy left to anticipate and prepare for the next
The answer to that question leads the executive to the challenges. This vicious cycle locks many organizations
vision of the organization. A clear vision provides the into a reactive posture. This research study is to assess
foundation for developing a comprehensive mission the impact of strategy formulations on organizational
statement [4]. Mission leads an organization from “what growth and development which in the long run enhances
do we want be become”? To “How do we become what organizational survival. It is common to hear these days
we want to be”? This is like asking the question, what is that, organizations are being shut down as a result of non-
our business? Asking the question, what is our business? performance, necessitated by sudden environmental
Is synonymous with asking the question, what is our changes. It is also common to hear that, a policy of the
mission? A business mission is the foundation for government has either positive or negative effect on an
priorities, strategies, plans and work assignments. It is the organization in Nigeria. Environmental changes affect
starting point for the design of managerial jobs and above organizations either positively or negatively. The changes
all, for the design of managerial structures [5]. Nothing in the consumption pattern of customers can also affect
may seem simpler or more obvious than to know what a the future of an organization negatively or positively.
company’s business is. Actually, “what is our business”? (Past studies of manufacturing firms [14-20] have
The answer to this question is the first responsibility of indicated that strategic formulation and planning result in
strategists. Only strategists can make sure that this superior financial performance, measured in terms of
question receives the attention it deserves and that the generally accepted financial measures (e.g., sales, net
answer makes sense and enables the business to plot its income, ROI, ROE, ROS). Subsequent studies [21-26] have
course and set its objectives. Strategy is the contradicted the notion of a strategy formulations and
determination of mission or purpose and the basic long planning-superior performance relationship. However,
term objectives of an enterprise followed by the adoption more recent studies [27, 28] provide convincing evidence
of courses of action and allocation of resources necessary that strategic planning does indeed result in superior
to achieve these aims [6]. financial performance. The fact that these studies
The strategic responses to environmental changes accounted for factors responsible for past research
are the strategy implementation and the process of contradictions (e.g., methodological flaws, no-robust
formulating the implemented strategies are strategic statistical methods) provides additional support for their
planning [7]. Major management theories such as those of conclusions. One stream of strategy formulation research
[8-12] emphasized that an organization can exercise has raised the issue of whether the length of time a firm or
strategic choice, even in the face of external constraints. organization has been involved in the strategy
The way and manner they may face strategic issues can formulation process has any impact on performance.
affect the overall growth and development of the This is to say that INNOSON might have formulated
organization. It goes on to agree with the input of [13] that strategies to meet up with certain changes but failed to

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

also change the product line and structure of the There is no relationship between strategy
organization to be in tune with the formulated strategies. formulation and organizational structure.
Each time an organization implements a strategy, it affects Strategy formulations do not affect the behaviour of
its organizational structure therefore appropriate workers.
organizational structure that matches the environment and There is no link between strategy formulation and
the productive activities of an organization is necessary organizational survival.
in strategic management [29]. Secondly, INNOSON just
like many other manufacturing organizations in Nigeria Overview of the Concept of Strategy Formulation:
was faced with developmental problems of behavioural The concept “strategy” is ancient, carried from the Greek
and systemic resistance to strategic changes in the word strategic, which means the art or science of a
organizations. Thirdly, the current world economic general. It is a military term used for describing grand plan
meltdown trend also affects the INNOSON Nigeria used for gaining advantage over adversary in war period.
Manufacturing Company Ltd, Emene Enugu as well as Today, the business organizations have adopted the
many other Nigerian Organizations negatively. Despite concept and it is now commonly used among managers.
these, no concrete research work has targeted to The concept can be used to denote a general programme
investigate the impact of the broad subject of strategy of action and deployment of emphasis and resources to
formulation on organizational growth and development in attain comprehensive objectives. Strategies are the firm’s
Nigeria. Existing studies in Nigeria, aimed at human overall plan dealing with and existing in its environment
resource development [30]. Related studies on this study [32].
were on strategic planning (an off shoot of strategic Strategies result from the process of deciding on
formulation) [31]. To these effect, this study attempts to objectives of organizations, on changes in these
empirically analyze how strategy formulation can be used objectives, on resources use to attain these objectives
by organizations like INNOSON to effectively derive plans and other policies that are to govern the acquisition, use
for growth and development. and disposition of these resources [33]. Strategy is the
science and art of employing the political, economic,
Objective of the Study: The broad objective of the study psychological and military forces of a nation or group of
is to investigate the effect of strategy formulation on nations to afford maximum support to adopted policies
organizational performance. [34]. Applying the above definition to business
organization, strategy is the science or art of employing
While The Specific Objectives Are: the group of organizations to afford the maximum support
To find out the extent of the relationship between to adopted policies of the organization or group of
strategy formulation and organizational structure of organizations [35]. Strategies are the broad programmes
INNOSON NIG. LTD Emene Enugu. for defining and actuating an organization’s objectives as
To examine the effects of strategy formulation on well as the organization’s response to its environment
workers behaviour at INNOSON NIG. LTD Emene over time [36]. Strategy is a unified, comprehensive and
Enugu. integrated plan designed to ensure that the basic
To determine the implications of strategy formulation objectives of the organization is achieved [37]. Strategy is
on organization survival. the firm’s action plan aimed at achieving its objectives.
Satisfying the needs of the customers and surviving the
Research Questions: The following questions will guide competition in its environment [38]. Therefore, strategy
the study involves rational planning. Any organization that is
To what extent is the relationship between strategy choosing its objectives, identifying the courses of action
formulation and organizational structure? that best enable it fulfill its goals and allocating resources
What has been the effect of strategy formulation on optimally is regarded as applying strategy. Strategies are
workers behaviour? the basic pattern of proposals and policies that define the
What is the implication of strategy formulation on firm and its business [39]. They state that strategy
organizational survival? answers such basic questions as:

Hypothesis: The following null hypothesis were What business are we in?
constructed to guide the study Who are our customers?

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

How do we compete? Ways of Formulating Strategies: The process of defining

What kind of organization are we? or formulating mission statement of an organization is a
What are we trying to achieve? major issue that should be done from the inception of the
organization. According to [45], strategies are the overall
Strategy Formulation: According to [40], strategy concepts of a firm’s business in terms of;
formulation is a guide to executives in defining the
business their firm is in, the ends it seeks and the means Product market scope strategy
it will use to accomplish those ends. Therefore, Growth-Vector strategy
organizations formulate strategy by firstly defining the Competitive advantages strategy and
mission of their organization. A company’s mission is the Synergy
unique purpose that set the company apart from others of
its type and identifies the scope of operations. The concept of strategy is a set of decision making
Organizations are consciously created at one point in time rules for guidance or organizational behavior [46].
to accomplish certain objectives [41]. In order to According to [47], strategy can be formulated through
accomplish the objectives which they have set, any of the following modes:
organizations formulate appropriate strategies which give The entrepreneurial mode
rise to development of organization structure through The adaptive mode
which the set objectives will be achieved, hence in The planning mode
strategic management; organizations choose appropriate
organizational structure that matches the environment in Entrepreneurial Mode: This is strategy formulation mode
which the organization operates as well as the productive that is mostly found in small scale businesses. Strategy is
activities of the organization. At the implementation level formulated by the owner of the businesses, hence the
of formulated strategies there could be further manager/owner of the business does not make any
environmental changes which indicates that there could consultation with anybody before arriving at what should
also be further strategic planning analysis of the new be his strategy. He does not make use of much data since
changes. This is done by the organization such that the small businesses keep little or no record. Therefore the
organization is not taken by surprise, which could lead to strategy is formulated based on intuition rather than
some losses in investment caused by the new changes. careful planning. The objective here is mostly to achieve
The new analysis to the changes are called real time rapid growth.
response issue or surprise issue [42].
When formulated strategies are being implemented as Adaptive or Incremental Mode: This method of strategy
a response to changes in the environment, two major formulation is mostly used by government agencies and
problems are faced by organizations [43]. The problems large firms facing relatively environment. Here strategy is
are: formulated based on the interplay of various powerful
coalitions within and outside the organization. In a
Behavioural Resistance To Strategic Changes And government agency, strategy formulation is influenced by
Systemic Resistance To Strategic Changes: The former the management team, the head of government, ministers
being mostly common among the middle and first line or commissioners, party stalwarts, legislators and the
managers who have most time feel that their interests general public. This is to say that there is no central
and positions may be affected by the new strategic source of power as in the entrepreneurial firm.
changes hence they psychologically resist the changes. Therefore there is no clear strategy for the organization.
The systemic resistance to changes occurs in a situation The strategy formulation is characterized by disjointed
where there are the structure deficiencies in the incrementalism, sequential piece-meal decisions in which
organization. The structure of the organization must each decision is created separately rather than item as part
contain appropriate skills system, flexibilities, managerial of an integrated whole as in the planning mode.
mentalities and critical success factors if the purpose for
which strategies were formulated must be accomplished. Planning Mode: This method of strategy formulation is a
These problems were profound in Nigeria organizations systematic and structured approach to the development
and in major sectors of Nigeria like INNOSON and this of an organization’s strategy. Here the internal and
resistance posses danger to the organizational external data related to the problems at hand are collected,
developments or strategic formulation [44]. analyzed and alternative strategies identified and

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

evaluated in terms of their costs and benefits before one Resource Analysis: The organization’s goals and existing
of the alternatives is selected as one of the organization’s strategy also provide a framework for analyzing its
strategies. It is mostly found in very large organizations, resources. This analysis is necessary to identify the
where planning specialists are employed to perform the organization’s competitive advantages and
functions of collection and analyses of data, on the basis disadvantages. These are the strengths and weaknesses
of which the operating executives made strategic of the organization relative to its present and likely future
decisions. competitors.

Steps In Strategic Planning: The formulation of the Identification of Strategic Opportunities and Threats:
strategy of an organization involves elaborate analysis of
Identifying strategy, analyzing the environment and the
technological, environmental and organizational resources
organization’s resources, come together in the fifth step
and other structural factors [48]. The elaborate analysis of
determining the opportunities available to the
organization’s technological and environmental factors
organization and the threats it faces. Opportunities and
which influence strategy formulation is called strategic
planning. The steps in this strategic planning for threats may arise from many factors, thus an environment
organizations according to [49], are as follows; Goal that pose a threat to one organization may offer
Formulation These are reviewing and understanding of opportunities to others. Determination of Extent of
the organization’s purposes, defining its mission and Strategic Change Required After the analysis of resources
established objectives which translate that mission into and environment, it is possible to forecast the result of the
concrete terms. The first step in goal formulation is to existing strategy. The longer that strategy has been in
define the mission of the organization. Identifying the place and the more stable the environment, the easier it
organization’s mission can take managers a long way will be to make this prediction. Then the managers can
toward deciding what objectives that will be pursued. decide whether or not to modify that strategy or its
Before deciding what their objectives are going to be, implementation. This decision should be based on
managers must know the purpose and mission of their whether performance gaps can be identified. A
organization. Identification of Current Objectives and performance gap is the difference between the objectives
Strategy Once the organization’s mission has been established in the goal formulation process and the result
defined and translated into concrete objectives; managers likely to be achieved if the existing strategy is continued.
are ready for the next stage in the process. Steps 2 An organization that continues successfully to implement
through 6 provide the basis for determining what must be a strategy formulated several years earlier may find no
done differently to achieve those objectives. The first
fault with its past performance.
step in these series is to identify the organization’s
existing objectives and strategy. Sometimes, the newly
Strategy Formulation Vs. Strategy Implementation:
defined mission and objectives will be quite similar to the
Before strategy formulation leaders have to identify the
mission and objectives on which the existing strategy was
based. Often, however, the goal formulation process need for change by proper care full scanning of
yields a substantial change in mission and objectives; this environment in which organization exist [50]. Environment
is especially true if the organization has been failing to scanning or situational analysis is the starting point of
meet key objectives. whole strategic process. In the strategy formulation after
changing the understanding of people about change
Environmental Analysis: The knowledge of leaders try to find different suitable ways to translate
organizational goals and existing strategy provide a frame organizations vision into realistic purpose (goals and
work for defining which aspects of the environment will objectives). In the strategy formulation process leaders
have the greatest influence on the organization’s ability sets the objectives then analyze the environment both
to achieve its objectives. The purpose of environment internal and external. Then fix the targets to be achieved,
analysis is to identify the ways in which changes in an sets the measures for performance evaluation and finally
organization’s economic, technological, social/cultural, select or formulate the proper strategy. Strategy
political/legal and ethical environment can indirectly formulation is all about planning for future [12]. On the
influence the organization. Direct influence is exerted on other hand strategy implementation is a process of
the organization as these factors act on the organization conversion in which planned strategies are converted into
market, industry, suppliers, competitors or key resources real actions. So that goals and objectives can be achieved
and skills.
[16].

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

Theoretical Framework Recognizing some of the weakness and vagueness of

Strategic Performance: The researcher reviewed the work previous management approaches, the balanced
of Kaplan and Norton in their theory titled the balanced scorecard approach provides a clear prescription as to
scorecard (B.Sc) strategy theory. According to [17], what companies should measure in order to ‘balance’ the
Performance is an outcome of strategy. The success with financial perspective. The balanced scorecard is a
which a firm’s business strategy effectively addresses its management system (not only a measurement system)
industry’s key success factors will determine its strategic that enables organizations to clarify their vision and
performance. Strategic performance is measured in terms strategy and translate them into action. It provides
of both financial and market success. They went further feedback around both the internal business processes
to posit that: and external outcomes in order to continuously improve
strategic performance and results. When fully deployed,
Financial performance is essential for continued the balanced scorecard transforms strategic planning from
business operations. Financial capabilities are critical an academic exercise into the nerve centre of an
in supporting functional strategies and making enterprise.
required infrastructure investments. For example, a
company with adequate funding can expand or Perspectives: The balanced scorecard suggests that we
invest, or can provide customer financing. view the organization from four perspectives and to
Market share demonstrates a firm’s ability to create develop metrics, collect data and analyze it relative to
and hold customers, which determines the long term each of these perspectives:
success of a firm. The freshness of product lines and
market positioning affect a firm’s ability to attract The Learning & Growth Perspective: This perspective
includes employee training and corporate cultural attitude
customers ahead of their competition.
related to both individual and corporate self-improvement.
In a knowledge worker organization, people who the only
Managerial: The balanced scorecard is a strategic
repository of knowledge – are the main resource. In the
planning and management system that is used extensively
current climate of rapid technological change, it is
in business and industry, government and non-profit
becoming necessary for knowledge workers to be in a
organizations worldwide to align business activities to the
continuous learning mode. Metrics can be put into place
vision and strategy of the organization, improve internal
to guide managers in focusing training funds where they
and external communications and monitor organization
can help the most. In any case, learning and growth
performance against strategic goals. It was originated as
constitute the essential foundation for success of any
a performance measurement framework that added
knowledge – worker organization.
strategic non-financial performance measures to
[37], emphasized that ‘learning’ is more than
traditional financial metrics to give managers and ‘training’ it also includes things like mentors and tutors
executives a more balanced view of organizational within the organization, as well as that ease of
performance while the phrase balanced scorecard was communication among workers that allows them to readily
coined in the early 1990s, the roots of this type of get help on a problem when it is needed.
approach are deep and include the pioneering work of
General Electric on performance measurement reporting in The Business Process Perspective: This perspective
the 1950’s and the work of French process engineers) in refers to internal business processes. Metrics based on
the early part of the 20th century [20]. this perspective allow the managers to know how well
The balanced scorecard has evolved from its early their business is running and whether is products and
use as a simple performance measurement framework to a services conform to customer requirements (the mission).
full strategic planning and management system. The These metrics have to be carefully designed by those who
“new” balanced scorecard transforms an organization’s know these processes most intimately; with our unique
strategic plan from an attractive but passive document missions these are not something that can be developed
into the “marching orders” for the organization on a daily by outside consultants.
basis. It provides a framework that not only provides
performance measurements, but helps planners identify The Financial Perspective: Timely and accurate funding
what should be done and measured. It enables executives data will always be a priority and managers will do
to truly execute their strategies. whatever necessary to provide it. In fact, often

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

there is more than enough handling and processing of loss of facts. Specifically, two descriptive research
financial data. With the implementation of a corporate methods were used namely, survey research and case
database. study. The data for this study were generated from both
the primary and secondary sources. The primary data
Empirical Review: The researcher reviewed the works of were generated through questionnaire administration,
[37] which they carried out on the same topic – the effect while the secondary data were from existing documents.
of strategy formulations on Organizational Performance The instrument for collection of primary data for this
using a consortium of manufacturing companies in the study was questionnaire. The questionnaire was
three (3) senatorial districts in Anambra State. Their structured and covered the essential problems and
work’s objectives tallied with the researcher’s objectives prospects of strategy formulation in INNOSON. The
one and two; they used the descriptive survey design and structured questions drawn from the objectives and
cluster sampling to select their firms. And they used the research questions of the study, gave the respondents
chi-square method to test their entire three hypotheses. opportunity to choose from the list. The population of
That the research was done at Anambra state using this study constituted of all the workers of INNOSON
clustered firms for the study gave this researcher the gap categorized into Management, Senior and junior staff,
to fill because, this research is conducted in Enugu totaling 185 [25]. Due to fluctuating economic trend in
State, using a well known manufacturing company with Nigeria, the company had carried out several staff
two (2) different statistical tools to test the hypothesis. rationalization/retrenchment exercises. This population of
The strategic measures they reviewed ranged from 185 was made-up of 20 Management, 65 Senior and 100
effective regulations to achieving favourable junior staff members. The researcher adopted the simple
macroeconomic environment. They posited that these random sampling technique to select those that
strategies will not promote the efficiency of the capital constituted the sample space. Selection without
market, the growth and development of the organization, replacement method was applied to pick the sample
but the overall promotion of the economic indices. Also elements. This was because it gave all members of the
the work of the [40] was reviewed as it relates to the population equal opportunity of being selected or
subject matter. He examined the effect of strategic otherwise. To draw a sample for the study from the
management on organizational performance of medium population, the researcher adopted the Freund and
sized manufacturing enterprise in Nairobi Kenya and also Williams formula for sample size determinate from a finite
investigated the effect of various administrative/legal population. It states thus.
factors on the extent to which formal strategic
management are adopted. His work objectives marched Z 2 Npq
the researcher’s third objective. He did a theoretical n=
Ne 2 + 22 pq
research on the subject matter using only the medium size
manufacturing companies – thus creating a yawning gap
which this research tends to fill by empirically analyzing where
the subject matter in Enugu State Nigeria – using a big n = Sample size
manufacturing company. N = Population = 185
From the above works of [41], the researcher found p = Probability of success = 80% (0.8)
some yawning gaps of not looking at the effect of the q = Probability of failure = 20% (0.2)
strategy formulation in a manufacturing sector of Nigeria Z = Standard error of the mean = 1.96
economy vis-o-vis its relationship to the organizational e = Level of significance = 5% (0.05)
structure and the workers’ behaviour and the statistical
tools to test the data using a big manufacturing firm as a Therefore substituting into the formular to determine
study – these and other interesting areas will be filled by the sample size
this researcher.
2
n=
(1.96) 185 ( 0.8) 0.2
Research Methodology: The descriptive research method 2 2
was used in carrying out this study. This method was 185 ( 0.05 ) = (1.92 ) ( 0.8) 0.2
chosen because it was the method that best interprets 3.8416 ( 29.6) 113.71135
= =
the problems as well as the prospects of strategy 0.4605 + 0.614655 1.077156
formulation in the INNOSON, Emene Enugu without ∴n= 100.

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

Testing of the Hypotheses: In order to test the hypotheses, the Parametric Test Method (T-test statistical technique) and
Non Parametric Test Method (Chi-Square (x2)) were used.
There is no relationship between strategy formulation and organizational structure.
Strategy formulations do not affect the behaviour of workers.
There is no link between strategy formulation and organizational survival.

Hypothesis I
Decision Rule:
Accept Ho if t cal < t tab
Reject Ho if t cal > t tab

Step 1:
H1:There is no relationship between strategy formulation and organizational structure.

Source: Field Survey (2015)

Step 2
T-Test: One-sample statistics

Step 3: One-sample statistic

Interpretation: This is a two tailed test with d.f = 80-1. From the statistical value for 0.05 at 79 d.f is 1.99. Since the
calculated value t = 65.588 is greater than the computed value of 1.99, we reject the null Hypothesis (Ho) and accept the
alternative Hypothesis (Hi). This implies that the adoption of strategy formulation have effect on the organizational
structure and productivity.

Hypothesis II
Decision Rule
Accept Ho if x2cal < x2 tab
Reject Ho if x2 cal >x2 tab
Ho2: Strategy formulations do not affect the behaviour of workers.

Step 1
Ho2:

Source: Field Survey (2015)

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

Step 2:
Chi-SquareTest
Frequencies

Source: Field Survey (2015)

Step 3:
x2 = (0-E)2 = 22.90/E

a
: 0 cells (0%) have expected frequencies less than 5. The expected cell frequency is 26.7

Interpretation: The degree of freedom (df) = 2. From the statistical value for 0.05 at 2 degree of freedom is 5.991. Since
the calculated value x2 = 22.90 is greater than the computed value of 5.991, we reject the hull hypothesis (Ho 2) and accept
the alternative hypothesis (Ho2). This implies that behavioural and systemic resistance to strategic changes render
strategy formulation and implementation in the INNOSON, ineffective.

Hypothesis III
Decision Rule
Accept Ho if t cal < t tab
Reject Ho if t cal > t tab

Step 1
H3: There is no link between strategy formulation and organizational survival

Source: Field Survey (2015).

Step 2:
T-Test: One sample test

Step 3:
T-Test: One sample test

Interpretation: This is a two tailed test with d.f = 80-1. From the statistical value for 0.05 at 79 degree of freedom is 1.99.
Since the calculated value t = 68.865 is greater than the computed value of 1.99, we reject the hull hypothesis (Ho 3) and
accept the alternative hypothesis (H3). This implies that there is a link between strategic planning and organization’s
survival.

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

RESULT AND DISCUSSIONS behavioral and systemic resistance to strategic changes

in the organization and that this tends to render strategy
Judging from the various computation analysis and formulation and implementation ineffective. And also
findings, the results revealed some pertinent fact from there is a link between formulation of strategy and
which the researcher then drew certain conclusion. organizational survival. All these tend to agree with the
Considering the high percentage in favor of the three previous works of [24], [25] and [26].
tested hypotheses, it can be reasonably concluded that at
95% confidence, strategy formulation enhances CONCLUSION
performance and survival.
Most of the respondents strongly agree that strategy This study had shown that there were lots of benefits
formulation enhances better organizational development, from well conceived and formulated strategy. The most
growth and productivity, as this also constituted part of problem area was in its application to planning,
the hypotheses used for this study. Few agree while just organizational structure and design, environmental and
a little of the respondents were undecided. Hence, it can technological changes. These could contribute to loss of
be deducted from the above responses that strategy customers and. resistance by workers to changes etc.
formulation have effect on the organizational structure, its Therefore in conclusion, strategy formulation and its
productivity, its growth cum development. it can be implementation enables organizations like the INNOSON
summarized that it enhances better organizational Manufacturing Company Limited to thrive in growth and
performance. development and also place the company in a position
The data also revealed that whenever there was a where it will continue to secure its productive activities
change in strategy, it brings about structural changes to and reduce environmental uncertainties in areas of
match the strategic changes with capabilities, but constraints, threats and opportunities, hence the
behavioural and systemic resistance by workers who were Management of the INNOSON Manufacturing Company
afraid to lose their positions seem to render the strategy Limited can be measured in terms of its environmental and
formulated ineffective. This could have arisen as a result technological impact in the Automobile Industry in
of additional work load that might be created by the newly Nigeria.
formulated strategy which could be beyond the working
capacity of the already overloaded workers, but after
sometime, the workers began to understand the new Recommendations: From the findings, the following
strategy and getting used to it hence greater performance recommendations were therefore adduced:-
on the part of workers. This was observed from the The top management should take more responsibility
responses in almost all of the respondents strongly agree in reducing uncertainties for the organization
and agree that there is a link between strategy formulation through strategy formulation. By this, they can gain
and organization’s survival, which was the final back their customers through product line
hypothesis tested in the study, while just a very few of diversification strategy and strategic technological
the respondents were undecided, none of the changes, to be in tune with the current consumption
respondents disagree nor strongly disagree. Hence, it can pattern in the manufacturing Industry in Nigeria.
be concluded that there is a link between strategy The management should through strategy
formulation and organization’s survival, using the above formulation and positioning of activities, integrate
responses as proves. the management functions through the process of
organizational design in terms of strategy
Summary: The findings from the analyses based on the implementation. This will go a long way increasing
obtained data revealed that the INNOSON Manufacturing the workers productivity.
Company Limited looses sales as a result of change in Behavioural and systemic resistance should be
consumption pattern of their customers. The findings also reduced, through appropriate organizational
revealed that a well conceived and formulated strategy structure and workers should be well informed on
matched with well structured organization increases why such strategic changes. This will reduce fear
productivity and again that, there was existence of and encourage workers to perform optimally.

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 World J. Manage. & Behav. Stud., 3 (1): 09-20, 2015

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