STRATEGIC FORMULATION AND ORGANIZATIONAL PRODUCTIVITY OF MANUFACTURING COMPANIES

SEMINAR II

BRIGGS, BEYE FRANK VICTOR

SEMINAR SUBMITTED TO THE DEPARTMENT OF MANAGEMENT, FACULTY OF MANAGEMENT SCIENCES IN

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF DOCTORAL DEGREE (Ph.D) IN
MANAGEMENT OF THE IGNATIUS AJURU UNIVERSITY OF EDUCATION, PORT HARCOURT

SEPTEMBER, 2023
 ABSTRACT

This study examined the effect of strategic formulation on organizational productivity of manufacturing companies. Several
studies on strategic formulation have established that many organization’s leaders are inadequately prepared in the area of
management especially planning. As such, very few organizations have strategic plans. However, the specific objectives of the
study are, to ascertain the effect of functional level strategy on quality of manufacturing companies, and, to ascertain the effect of
competitive strategy and efficiency of manufacturing companies. The study was anchored on Resource-Based Theory. In
conclusion, strategy formulation and its implementation enable organizations to thrive in growth and development and also place
the company in a position where it will continue to secure its productive activities and reduce environmental uncertainties in areas
of constraints, threats and opportunities. The study recommends that, the strategy formulation team should undergo relevant
training in the strategic planning process. This will empower them with skills necessary to formulate strategic plans for the
organization.

Keywords: Strategic Formulation, Organizational Productivity, Functional Strategy, Competitive Strategy, Quality, Efficiency.
 BACKGROUND TO THE STUDY

 The uncertain nature of the business environment, as well as the fierce competition that results in constant changes to the
business world, are features of twenty-first-century organizations. Change management in a highly competitive business
environment determines the level of organizational productivity (Areiqat et al., 2019).

 Organizations leverage strategic planning in dealing with the new trends and changes in the new business environment to
strengthen and enhance the organizational ability to adapt and learn intentionally.

The organizations in Nigeria are yet to satisfy the stakeholders' expectations of more returns on investment, in doing this,
organizations should develop a strategic and measurable framework to guide business and operational decisions to meet
stakeholders' expectations (Jafar, 2017).

 Stakeholders expect their business to yield more profits. This can only be achieved if the organization performs optimally
(Fransiskus, Deidhae, and Hardyanto, 2021). For firms to function productively, employees are expected to be involved in the
strategic planning process.

 The customers' perception could be one of the reasons the firms in Nigeria are not doing exceptionally well. An average Nigerian
would prefer any products or services from a foreign context. This is because they place more value on foreign products or services.
Invariably, the contribution of the firms in Nigeria to the GDP is affected. Based on the foregoing, it becomes imperative to
investigate the relationship between strategy formulation and organizational productivity.
 STATEMENT OF THE PROBLEM

 Several studies on strategic formulation have established that many organization’s leaders are inadequately prepared in the area of
management especially planning. As such, very few organizations have strategic plans.

 Chatira and Mwenje (2018) in their study concluded that organizations in Nigeria faced management related challenges such as
leadership, development, time management, and managing organization’s budget.

 This study focused on organizations that were already applying strategic plans with the aim of establishing whether this practice
was contributing to enhancing the productivity of organizations.
 CONCEPTUAL FRAMEWORK

STRATEGIC ORGANIZATIONAL
FORMULATION PRODUCTIVITY

Functional Level Strategy Quality

Competitive Strategy
Efficiency

Macmillan and Tampoe (2000), and Olusanya et al. (2012). Researcher’s conceptualization, 2023
 AIM / OBJECTIVES OF THE STUDY

The specific aims / objectives of the study are:

To ascertain the effect of functional level strategy on quality of manufacturing companies
To ascertain the effect of competitive strategy and efficiency of manufacturing companies
 SIGNIFICANCE OF THE STUDY

 How to strategically plan their business to thrive in a depressed economy. It is a well-known fact that a problem whose causes are
identified is almost completely solved.

 Since this study is carried out to identify the importance of strategic formulation for the productivity of organizations, it will then be a
pointer to some of the solutions to problems faced by organizations.

 The research is also to help human resource scholars to whom the thesis will serve as a ready reference material, given the dearth of
researches in the field of strategic management.
 REVIEW OF RELATED LITERATURE
 Strategic Formulation
The literature on strategic management shows that the terms strategic formulation, strategy-making, strategy development and strategic
planning are used interchangeably (Pratiwi et al.,2017; West et al., 2018). According to Pasha and Poister (2017) strategy formulation deals
with establishing an overall direction for the enterprises, setting targets at various levels in the organization, and developing strategic
alternatives to reach those targets.

 Functional Level Strategy

The operating divisions and departments in an organization represents the functional levels. These units are involved in making sure that the
development and coordination of resources through corporate and business level unit strategies are executed efficiently and effectively
(Lehner, 2004).

 Competitive Strategy
Competitive strategy is a management discipline, which focuses on the organization's mission, searches for unique opportunities, determines
whether they fit the organization's strategic direction, defines the measures for success, and continually reassesses opportunities (Gaynor,
2002).

 Organizational Productivity
Olusanya et al.(2012) define organizational productivity as how efficiently and effectively managers use resources to achieve the
organization's set goals. Various criteria define organizational productivity; some can be measured numerically, while others require a
qualitative, logical, and systematic approach.

 Quality
There are two generally recognized aspects of quality: quality of design and quality of conformance (Montgomery 2013, Besterfield et al.
2006). Quality of design refers to intentional variation in the type or grade of a product that is to be made. Quality of conformance refers to
the uniformity of the product and how well it conforms to the specifications of the design.

 Efficiency
Organizational efficiency is the successful input transformation into output by employees in organizations, it should be properly planned in
order to enable organizational objectives to be attained with the lowest possible cost, which may mean either money costs or human costs or
both (Bartusevicene & Sakalyte, 2013).
 THEORETICAL REVIEW

This study was anchored on Resource-Based Theory.

RESOURCE- BASED THEORY

The resource-based theory emanates from the principle that the source of an organization's competitive advantage lies in its internal
resources as opposed to their positioning in the external environment. This theory, asserts that competitive advantage depends on the unique
resources and capabilities that a organization possess. (Barney, 1995). The resource-based approach stipulates that in strategic formulation,
the fundamental sources and drivers of fir organization's superior productivity are mainly associated with the attributes of their resources and
capabilities which are valuable and costly to copy (Peteraf & Bergen, 2003). Organization resources could be classified as physical, human,
and firm resources. The physical resources are the technology, plant and machinery, geographical location, and access to raw material.
 EMPIRICAL REVIEW

 Kitonga et al.(2016), carried out a research with an aim of investigating the relationship between strategic management and
organizational productivity in not-for-profit organizations. The paper was carried out by collecting primary data from the NPOs (also
known as CEOs and Directors etc.) and other members of top management team (project managers) from the sampled not-for-profit
organizations in Nairobi county, Kenya.

 The paper tested for reliability of measurement constructs using Cronbach’s alpha and tested for validity by calculating content validity
index. The data was then analyzed using statistical techniques such as descriptive statistics analysis, multiple regression analysis and
correlation analysis. The regression analysis results indicated that all the components of strategic leadership named correlate positively
with organizational productivity. The results further indicated that strategic decision and human capital correlate significantly with
organizational productivity while ethical practices and organizational control do not have a significant correlation with organizational
productivity. Their general conclusion is that strategic leadership has a positive significant relationship with organizational productivity.

 Nthini (2013), carried out a research with an aim of investigating the effect of strategic leadership on productivity of commercial and
state corporations in Kenya. The paper was conducted amongst employees working in charge of strategy and human resource department.
They used descriptive survey design and collected data using questionnaires. The analysis of strategic leadership in commercial and
financial state corporations showed that, in positive organizational culture core values, symbols and ideologies are shared. Balanced
organizational controls showed a positive strong relationship with annual employee turnover. All the components of strategic management
correlated highly with customer satisfaction, return on investment, net profit margin and low annual employee turnover. This implied that
effective strategic management promotes organizational productivity.
 CONCLUSION
In conclusion, strategy formulation and its implementation enables organizations to thrive in growth and development and also place the
company in a position where it will continue to secure its productive activities and reduce environmental uncertainties in areas of
constraints, threats and opportunities, hence the management of the organization can be measured in terms of its environmental and
technological impact in Nigeria.
 RECOMMENDATIONS

The following are recommended:

The top management should take more responsibility in reducing uncertainties for the organization through strategy formulation. By this,
they can gain back their customers through product line diversification strategy and strategic technological dynamic, to be in tune with the
current consumption pattern in the organization.
The strategy formulation team should undergo relevant training in the strategic planning process. This will empower them with skills
necessary to formulate strategic plans for the organization.
The management should through strategy formulation and positioning of activities, integrate the management functions through the
process of organizational design in terms of strategy implementation. This will go a long way increasing the employees’ productivity

CONTRIBUTION TO SCHOLARSHIP

The study contributed to scholarship in the following ways:

The effect of functional level strategy on quality of manufacturing companies

The effect of functional level strategy and efficiency of manufacturing companies
The effect of competitive strategy and quality of manufacturing companies
The effect of competitive strategy and efficiency of manufacturing companies