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European Journal of Social Sciences - Volume 22, Number 2 (2011)
Strategic Control and Corporate Performance in the

Manufacturing Industry ~E viden e from Nigeria
o. L li(U e
Department of Business Administration.
University of Logos, Akoka- Yaba, Lagos State, Nigeria
E-mail: Iabikuye O yahoo.com
B. E. A. }ghojafor
Depa rtmen 1 of Business Admin iSI ration
University of Lagos, Akoka-Yaba. Lagos State, Nigeria
Abstract
Globally, the increa: e in business competition and the campaign for sustainable economic
development is redirecting the attention of firms towards strategic control. The
manufacturing industry remains one or the most critical engines for economic growth, and
its performance as a catalyst to transform the economic structure of countries cannot be
over-emphasized. Hence, this paper examines the relationship between strategic control
and corporate performance in the manufacturing industry in Nigeria. A survey research
method was used to generate data from a sample of manufacturing firms in Nigerian on
strategic control and corporate performance variables. Responses from the survey were
statistically analyzed using descriptive statistics, product moment correlation, regression
analysis and Z-test (approximated wirh the independent sample Hest). The results of the
study indicate a statistical significant relationship between strategic control and corporate
performance as well as reveal a significant difference between the performance of firms
whose strategic control are low and those whose strategic control are high. The research
findings provide insights regarding how the interaction between strategic control and
corporate performance would assist the growth and development of the manufacturing
sector in Nigeria. This study provides important implications for the management of
manufacturing organisations. In order to improve corporate performance, manufacturing
firms need to demonstrate high level of commitment to strategic control.
! Keywords: Nigeria; strategic control; corporate performance; manufacturing industry;

I
1. Introduction
Globally, the increase in business competition and the campaign for sustainable economic development
is redirecting the attention of firms towards strategic control. Strategic control is a concept that is
designed to help top management deal with change and other problems after a strategic plan has been
prepared (Edwards and LaFief, 2011). Unfortunately, concerning manufacturing, strategic control has
received little or no attention in the developing economies literature.
The manufacturing industry remains one of the most critical engines for economic growth and
are increasingly important laboratories for scholars interested in researching where a variety of market
frictions-information, asymmetry, liquidity constraint, i niegration and market diversification, for
example, are most amplified (Sangosanya, 2(11). It acts as a catalyst to transform the economic
structure of countries, from simple, slow-growing and low-value activities to more productive activities
177
European Journal of Social Sciences - Volume 22, Number 2 (201 I)
that enjoy greater margins, and have higher growth prospects. But its potential benefits are even greater
in present times. With rapid technological change and far-reaching liberalization, manufacturing has
become the major means for developing countries to benefit from globalization and bridge the income
gap with the industrialized world (Mike, 20 10).
On the basis of the enumerate roles played by firms in fostering growth via the manufacturing
industry as evidenced in developed and few emerging economies, one can clearly posit that
manufacturing firms are one of the major sources of economic propeller through the production and
export contribution (Sangosanya, 2011). These are some of the several arguments that justify the
importance of promoting manufacturing in the developing world (Mike, 20) 0).
In Nigeria, for a manufacturing firm to be competitive and increase its performance, the
adoption of strategic control is perhaps imperative. To effectively fulfil organisational objective, firms
need to understand the consequences of strategic control (Chen, Park and Newburry, 2009). A firm that
does not control its activities may find itself threatened with its very survival (Marshall, 2011).
Strategic control is focussed on both external and internal factors. Even though environmental factors
are largely beyond the control of top managers, the managers must deal with those factors, and
strategic control provides a method for doing so ((Edwards and LaFief, 2011), and consequently helps
to enhance corporate performance.
This paper appears to be the first comprehensive study on the relationship between strategic
control and corporate performance in the manufacturing industry in Nigeria. Most studies in this area
have been on developed economies. This paper contributes to existing literature by focusing on the
manufacturing industry in Nigeria, a developing economy, to ascertain whether there is a relationship
between strategic control and corporate performance.
./
1.1. Scope of the Study
This paper examines the relationship between strategic control and corporate performance in the
manufacturing industry in Nigeria. The choice of manufacturing industry was made because of its
relevance and potential to Nigeria's economic development (Kuye and Sulaimon, 2011). Sample was
drawn from manufacturing firms in Lagos state. Lagos state was the focus because it is undoubtedly
the commercial nerve centre of Nigeria, with the largest concentration of industries (Iwugo, D' Arcy
and Andoh, 2003), and over 55 percent of manufacturing firms in Nigeria have their head offices
located in Lagos state (MAN, 1994; MAN, 2003; MAN, 2006). Hence, Lagos proffers an attractive
place for the study.
2. Literature Review
Initially strategic control was seen as enabling managers to see if their chosen strategies were being
successfully implemented. This view has since been extended. People can be seen as 'caculative
receptors' their behaviour to perform can be in flucnced by a strategic control system. They receive a
stimulus, interpret this, assessing the perceived costs and benefits of various responses and are likely to
select whichever course will maximise their gain. A broader view is that strategic control systems will:
co-ordinate the efforts of employees; motivate individual managers; and alter direction dependent on
circumstances (Livin, Sorina and Radu, 2008) .
.Singh (2006) defines strategic controls as the formal target-setting, measurement, and feedback
'hat allow strategic managers to evaluate whether a firm is achieving superior efficiency, quality,
innovation, and customer responsiveness and implementing its strategy successfully. According to
Prasad (2002), Strategic controls is the process of taking into consideration the changing assumptions,
both external and internal to the firm, on which the strategy is based, continually evaluating the
strategy as it is being implemented, and taking corrective actions to adjust the strategy to the new
requirements. In this way, strategy controls are pro-action mechanisms which give early warning, as
opposed to post-action controls which evaluate only after the implementation has been completed
European Jouruul o/Socio/ Sciences - Volume 22, Number 2 (2011)
(Kazrni, 2002). According to Schreyogg and Steinmann (1987), Strategic controls focuses on two
questions of whether: the strategy is being implemented according to plan; and the outcomes produced
by the strategy are those intended.
2.1. Types of Strategic Controls

However, there are four types of strategic controls (Schreyogg and Steinmann, 1987):
1. Premise control
2. Implementation control
3. Strategic surveillance
4. Strategic alert control
2.1.1. Premise Control

Premise control is designed to continuously check the validity of the assumptions underlying the
strategic plan and implementation process (Solieri, 2000). In other words, is designed to monitor
systematically and continuously whether or not the premises set during the planning and
implementation process are still valid (Schreyogg and Steinmann, 1987). This allows the strategies to
take corrective action at the right time rather than continuing with a strategy which is based on
assumptions. Premise control is imperative to identify the key assumption, and keep track of any
change in them in order to assess their impact on strategy and its implementation (Kazmi, 2002). The
premises should be listed and then assigned to individuals or departments who are qualified sources of
information. Prasad (2002) asserts that premises are concerned with two types of factors: environment
and industry:
I. Environmental factors. According to Singh (2006), environmental factors are beyond the
control of a firm and they exercise considerable influence over the success of the strategy. Any
critical change in these factors (for example, economic, political-legal, technological and
Ssocial-cultural) between the period of strategy formulation and its implementation calls for
change in strategy (Prasad, 2002).
2. industry factors. A strategy may also be based on certain premises related to industry factors.
Competitors, substitutes, suppliers, and barriers to entry are industry related factors about
which strategic assumptions are made. Managers must select those premises and variables that
are likely to change and would have a major influence on the firm and its strategy (Singh,
2006).
In order to have effective premise control, Prasad (2002) suggests that a firm may proceed in
the following ways:
~. Identify the vital premises which are important for strategy implementation. Thus, those
premises which are likely to change must be selected for monitoring.
2. Individuals in the firm who possibly could have access to the relevant information about
I premises should be entrusted the responsibility for monitoring premises.
l Ascertain trigger point at which a change in strategy is required. A trigger point is a feature of a
situation which necessitates change in strategy. For instance, in the case of a new product
launch, if competitors' move is offensive, the strategy may be changed from head-on
competition to indirect competition by changing the product positioning.
2. 1. 2. Implementation Control
Once the implementation of the strategy plan has commenced, an additional source of feed forward
information, effects of actions, becomes available. The task of implementation control is to assess
whether the entire strategic controls should be changed in the light of past events. In other words,
implementation control continuously questions the basic direction of the strategy (Schreyogg and
Steinmann, 1987). In the view of Kazmi (2002), implementation control aims at evaluating whether the
plans, programmes and projects are actually guiding the firm towards its predetermined objectives or
European Journal of Social Sciences - VOIIllI7l:' 21, NIIIIII",,. 2 (20/ I)
not. If, at any rime, it is felt that the commitment or

rcxu Irccs to a plan, programme or project would
not benefit the firm as envisaged, they have to be revised.
Solieri (2000) sees implementation COnLr)J as that which is not designed to assess whether the
_ ·~·,{rategyis being implemented as planned but to assess the broad strategic course for potential change
or modification.
According to Schreyogg and Steinmann, (19H7). implementation control should apply to
current strategy (old strategy) as well as to new st(;llcgic projects. For new strategic projects,
implementation controls answers the question of whether the project should be terminated prematurely
or not. This 'Stop/Go' assessment can use a number or different milestones in the form of strategically
critical thresholds (time, costs, research and development, success, etc (Schreyogg and Steinmann,
1987). According to the authors, in order to control the current strategy, standards (milestones) should
be provided in strategic plans. These are intermediate goals which are regarded as suitable short-term
indicators for the long-term success of the strategy. Furthermore, for reasons of efficiency, strategic
thresholds may be defined. Exceeding such limits may be regarded as a trigger for a red light. Such a
signal, however, does not automatically signify a crisis or Cl failure. A re-evaluation can reveal that the
strategy continues to be successful in spite of exceeding the limits (Schreyogg and Steinmann, 1987).
Two types of implementation control have been identified:
L Identification and monitoring of strategic thrust. Implementation control may be performed
through identification and monitoring and strategic thrusts such as an assessment of the
marketing success of a new product after test-marketing. The firm may assess the benefit from
the product launch or whether it is beneficial to select another programme (Singh, 2006). These
thrust according to Prasad (2002), provide information which can be used as basis for
subsequent actions.
2. Milestone reviews. Milestone reviews identify vital points in strategy implementation which
may be in form of major resources, critical events or a passage of a certain amount of time.
Each milestone requires critical assessment in terms of time and cost Prasad (2002) and a full-
scale reassessment of the strategy and the advisability of continuing or refocusing the direction
of the firm (Singh, 2006). .
2.1.3. Strategic Surveillance

According to Kazmi (2002), the premise and implementation types of strategic controls are rather
specific in nature. On the other hand, strategic surveillance aims at a more generalised control designed
to monitor a wide range of events inside and outside the firm that are probably to threaten the course of
a firm's strategy. Succinctly put, strategic surveillance must remain as unfocused as possible so that the
controls can function as a broad monitoring activity and detect events that may not have been
anticipated (Solieri, 2000). As a consequence, if strategic surveillance must succeed, the monitoring
process must be kept open. Pre-structuring it by setting up a list of critical control issues in advance,
should be avoided. Only then will there be a good opportunity of picking up unforeseeable or
previously undetected critical events (Schreyogg and Steinmann, 1987).
2.1.4. Special Alert Control

As Singh (2006) explains, the special alert control is based on Cl trigger mechanism for quick response
and urgent revaluation of the strategy in the light of sudden and unexpected events. Such an event may
_ be in the form of technological invention making the present technology completely obsolete, war
~ween two or more countries affecting the business prospects, strategic actions taken by a country or
countries together controlling some vital resources. Such an occurrence should trigger an immediate
and deep reassessment of the firm strategy (Prusad, 2002). Special alert control can be performed
through the formulation of contingency plans and assigning the responsibility of handling unforeseen
ovents to teams concerned with crises management (Kazrni, 2002; Singh, 2006).
European JOIln/Ut ojSocia! Sciences - VoLume 22, Number 2 (2011)
However, it is important to note that when properly irnplemented and aligned with other control
systems, strategic control will provide unity of purpose to all levels of management and a shared
conception of the objectives of the firm, specified in the strategic mission (Fiegener, 1990). Strategic
controls provide the basis for adapting the finus strategic actions and directions in response to
environmental changes (Pearce and Robinson, '20(3). For an organisation to remain competitive,
achieve continuous improvement and increased performance, it is probably necessary to establish
strategic controls. Supporting this view, Livin, Soriua and Radu (2008) assert that strategic controls
can be used as a means of: clarifying what good performance is. According to Solieri, (2000), strategic
controls can be performance enhancing when they are properly deployed for a given strategy and
within a particular environment. Therefore, it i~ believed that organisations that want to achieve
increased performance may require strategic controls.
Unfortunately, while several attempt have been made to develop instruments to measure the use
of strategic control, fundamental questions about the nature of strategic control in firms and the
relationship to performance have not been clearly investigated (Solieri, 2000). Hence, the following
hypotheses are proposed:
Ho1: There is no significant relationship between strategic control and corporate performance.
H()2: Strategic control has no signi ficant impact on corporate performance.
Ho:l: There is no significant difference between the performance of firms whose strategic control
are high and the performance of firms whose strategic control are low.
3. Methodology
In order to examine the relationships that exist between strategic control and corporate performance in
Nigeria, a cross-sectional survey design was used by collecting data from a defined population. The
use of survey research method is justified because it follows a correlational research strategy and helps
in predicting behaviour (Bordens and AbbotL. 2002). It also helps to ascertain whether or not a
relationship exists between the variables of study (Kerlinger, 1973). Responses were sought from
manufacturing firms on a Wide range of issues relating to strategic control and corporate performance.
The population of this study comprised manufacturing firms in Nigeria. Since 55.2 percent of
Nigeria's 2250 manufacturing firms are based in Lagos state (MAN, 1994 and MAN, 2003), Lagos
was therefore considered a good representation of manufacturing firms in Nigeria. Hence the
population sample was taken from Lagos state.
The questionnaire was administered on manufacturing firms in Lagos state with the help of
field research assistants. Manufacturing firms in Lagos state constitute the sample frame which is a
representative subset of the population from which the sample was drawn. A top manager or chief
executive of every selected firm was approached and persuaded to fill the questionnaire. These
individuals were pleaded with to see the relevance of the study to their organisation. The
manufacturing firms which did not participate were apathetic and unwilling to divulge information.
Some adduced reasons such as management policy and suspicion to justify there lack of cooperation,
A simple random sampling technique was used in selecting the participating manufacturing
firms. A total of 740 copies of the questionnaire were administered on the manufacturing firms but 670
were completed and returned. This represents 90.54 percent response rate. According to Saunders,
Lewis and Thornhill, (2003), sampling is a pan of the entire population carefully selected to represent
that population. The justification for using random sampling technique is that it eliminates the
possibility that the sample is biased by the preference of the individual selecting the sample (Bordens
and Abbott, 2002). Another justification is Ih~H it is particularly necessary when one wants to apply
research findings directly to a population (Mook, 1983).
The participating manufacturing firms constituted the units of analysis. The administration of
the questionnaire was done on one top manager or chief executive at each firm surveyed. The use of
European Journal of Social Sciences - Volume 2::', Number 2 (2011)
primary data method is justified because according to (CUWlOn, 1998), it is the quickest and simplest of
the tools to use, if publication is the aim,
4. Empirical results
4.1. Variables and Measures
4.1.1. Strategic Control
A five-point Likert scale involving three items developed by Barringer and Bluedorn (1999) was
adapted. The scale ranging from "not important to very important" was applied to assess a firm's
emphasis on strategic control. Respondents' rating on all the items were summed up and averaged to
obtain a strategic controls index, Strategic control index is classified high when the index is equal to or
greater than 4.0 and low when it is lower than "LO. A reliability score of 0,91 was obtained from the
Cronbach's alpha test using the adapted scale from 3arringer and Bluedorn (l999).
4.1.2. Corporate Performance

Corporate performance scale comprises ten performances criteria derived from Khandwalla (1995).
The ten performance criteria include: profit growth, sales revenue, financial strength, operating
efficiency, performance stability, public image, employee morale, environmental adaptation, new
ideas, and social impact on the society. A five-point Liken scale was applied to measure the extent of
the firms' performance, using the ten criteria. The scores on the ten items were summed up and
averaged to determine the mean index of firms' performance. An index of less than 4.0 was regarded as
low firms' performance while an index of 4.0 and above was regarded as high firms' performance. A
reliability score of 0.86 was generated from the Cronbach' s alpha test using the adapted scale from
Barringer and Bluedorn (1999).
4.2. Analytical tools and Hypotheses Tests and Results

To derive useful meaning from the data, and examine the propositions of this study, data from the
survey were analysed using SPSS (Statistical Package for Social Sciences) as well as the following
descriptive and inferential statistical techniques:
Descripti ve statistics such as mean, percentages and frequencies were employed in the study to
measure demographic characteristics of respondents, [0 answer research questions relating to strategic
control and corporate performance. They are not meant to test a formal research hypothesis, but rather
the summaries from a sample that characterise that sample (Sirnon, 2002). According to Kerlinger
(1973), studying sets of numbers as they are is cumbersome; thus, it is necessary to reduce the sets in
two ways: calculating the averages and calculating the measures of variability.
'Product-moment correlation was used to examine the existence of relationship between
strategic control and corporate performance.
Regression Analysis was used to ascertain the amount or variations in the dependent variable
which Can be associated with changes in the value of an independent or predictor variable in the
absence of other variables.
Z-test (approximated with the independent sample Hest in the SPSS package) was employed to
test the hypothesised relationship as stated in null hypothesis 3. Since the data were collected on a
rating scale which is 'presumed to be interval scale', this parametric test is considered appropriate
--- (Emory and Cooper, 1991). Also, going by the central limit theorem, "for sufficiently large samples
(n=30), the sample mean will be distributed around the population mean approximately in a normal
distribution. Even if the population is not normally distributed, the distribution of sample mean will be
normal if there is a large enough set of samples" (Cooper and Schindler, 2001). Since the sample size
- for this study is large (n=670), the use of this statistic is justified.
European Journal ojSociul Sciences - Volume 22, Number 2 (2011)
The demographic profile of respondents ill Table j reveals that majority of the respondents
were males, constituting 86 percent of all the respondents. Respondents who were 30 but less than 60
years old make up 89.9 percenl of the entire rcspondcru». Those who were Jess than 30 years old
constitute only 8.4 percent, while 60 years and above constitute an insignificant proportion 0.8
percent) of the entire respondents. Majority of the respondents sampled were married and they
constitute 80.1 percent, while 17.9 percent were single. The divorced, widower and widow make up
only 1.9 percent. Also, in terms of educational quulilication, majority (46 percent) of them were
masters' degree holders. Respondents who were holders of bachelor's degree or equivalent constitute
32.4 percent while those who had professional quali Iications make up 21 percent. Doctoral degree
holders constitute the least (0.6 percent) or all the educational qualifications.
Table 1: Demographic profile of respondents

--------,--------------,
___!;requeucy Percent
1------------,---------- ----
---
Male 576 86.0
Sex Female 94 14.0
Total 670 100.0
Less than 30 56 8.4
30 but less than 4() 146 21.8
40 but less than 50 200 29.9
Age (in years)
50 but less than 60 256 38.2
60 and above 12 1.8
Total 670 100.0
Single 120 17.9
Married 537 80.1
Divorced 5 0.7
Marital status
Widower 2 0.3
Widow 6 0.9
Total 670 100.0
Bachelor's degree or 217 32.4
equivalent
Educational qualification
Masters' degree I 308 46.0
Doctoral degree I 4 0.6
Professional qual i Iicauun J 141 21.0
'--- Total
.l-:c..::..::..:~___________ _ 670 100.0
--------~------~~~------~
Source: Survey 2009
Table 2 shows the demographic profile or firms. This reveals that the number of firms with
workforce that is less than 50 employees constitute the highest (17.9 percent), while those with above
350 employees are the lowest (I L percent).
Table 2: Demographic profile of firms

.-----+--------------------------:.---------.------,:--------,
r-:---:-----,,-----,--------r-::--------- ._
.. ..::F_'.:.I.::.·e::J...:{fl::.:te:.:.:ll:.::.c"--v
__ ----1r- .:..P~er_.:::c~el::.:lt ___l
Number of employees Fewer than 50 120 17.9
50-100 110 16.4
101-ISO 102 15.2
ISI-200 98 14.6
201-250 t;9 13.3
2S 1-350 77 I1.S
Above 3S() 74 11.0
Total 670 100.0
Age of organisation (in years) Less than S 16 2.4
S but less thun 20 198 29.6
20 but less than 3() 206 30.7
30 years and above 250 37.3
Total 670 100.0
Source: Survey 2009
European journal of Social Sciences - volume 22. NI/IIlI)l'J" 2 (2()! I)
In terms of the age of (he firms, those who are 30 years and above constitute the highest (37.3
percent). Organisations that are less than 5 years old constitute only 2.4 percent of the entire
participating firms.
4.2.1. Mean indices, correlation coefficient, U' >~i'cssi m analysts and independent samples test
Table 3: Mean index of strategic control

------_.
Strate ic Control indicators ---_ .. _- Freauencv Averal!e weight
4.04
Formal Face-to-face meetings between lop managers and bus iness unit or functional 670
area personnel in meeting predetermined objecti ves
Informal face-to-face meetings bel ween top managers and b w,ille~s unit or functional 670 3.70
area personnel in meeting predetermined objectives
Measuring performance agninst subjective strutegic cruerin. \ uch ," improvements in 670 4.12
customer satisfaction or progress on product innovations in 111eeung predetermined
objectives
Mean of means
L:.:..:.::.:::.:.:..:::.:...:==::.."..,:-:c------.-------- _.
3.95
Source: Survey 2009
Table 4: Mean index of corporate performance

-------- .-
Frequency Averal!e weight
Profit growth 670 4.19
Sales revenue 670 4.24
Financial strength 670 4.13
Operating efficiency 670 4.17
Performance stability 670 4.16
Public image 670 4.07
Employee morale 670 3.79
Environmental adaptation 670 3.97
New ideas 670 4.19
Social impact on the society 670 3.79
Mean of means ..-.----. 4.07
Source: Survey 2009
With respect to strategic control, the mean index of participating firms was 3.95, while the
mean index of participating firms concerning corporate performance was 4.07. See Tables 3 and 4.
Hypothesis (Ho1) was tested through correlations coefficients test. Pearson's product moment
correlations coefficient (0.721 **) indicates that strategic control and corporate performance are
significantly and positively correlated with each other at 0.0 I level of significance. Therefore, the null
hypothesis of no significant relationship is rejected. Thus, there is a significant relationship between
strategic control and corporate performance.
Table 5: Regression Analysis of strategic control and corporate performance
Table Sa: Model summar

Model Std. Error of the Estimate
4.929
Table 5b: ANOV A

Model Sum of Squares Mean Square F Sig.
Regression 17564.687 I 17564.687 773.304 .000
Residual 16221.677 668 24.284
) Total 33786.364 669
European .lournul o/"SOI'i{l1 Sciences - Volume 22, Number 2 (2011)
Table Se Coefficients ----.-

--l- Standardized
Model Unstandr re lized Co ·mdt·nts Coefficients Siz.
,--
II Std. E rrur
- - -_.--_.-----
Beta t P
(Constant) 13.361 1.035 12.908 .000
Strategic control :?.308 .OS'6 .721 26.894 .000
Dependent variable: corporate PCI.101'l//((1/(.'('
I' < 0.05
Hypothesis (Hu2) was tested through a Regression Analysis. The results of the Regression
Analysis of the relationship between strategic control and corporate performance are shown in Table 5.
Table Sb above shows that the analysis of variance of the fitted regression equation is significant with
F value of 773.304. This is an indication that tile model is a good one. Since the p-value is less than
0.05, it shows a statistically significant relationship between the variables at 95 percent confidence
level. Therefore, the null hypothesis of no ~ignirical1t impact is rejected. Thus, strategic control has a
significant im~act on corporate performance.
The R- statistic in Table Sa indicates th.u the model as fitted explains 52.0 percent of the total
variability in firms' performance. In other words, 52.0 percent of the total variability in corporate
performance can be explained by strategic control. The value of R2 = 0.S20 shows that strategic control
is a good predictor of corporate performance.
The standardized coefficients (Beta) value in Table Sc reveals that the independent variable is
statistically significant at 0.05 significant level.
Table 6: Independent samples test on perf'ormunce or lirrns that have high strategic control and those that
have low strategic control
6 a: Group statistics
N Mean Std. Deviation Std. Error Mean
Corporate performance 244 3.5795 .89442 0.05726
index 426 4.3545 .34401 0.01667
-
6 b Ind epen d ent sarnp es test
-- ---- -----
--
Hest for Equality of Means
95% Confidence Interval of the
Sig. Mean
T Difference
(2-lailed) Difference
Lower I Upper
Corporate performance -15.948 .000 -.77495 -0.87036 I -0.67954
Hypothesis (Ho)) was tested using Independent Samples Test. The results of the independent
sample t-test as revealed in Table 6a show that performance mean index (4.3S) of firms with high
strategic control is different from the performance
1
mean index (3.S7) of firms with low strategic
control. This difference between the two mean was found lO be statistically significant at p < .OS (Table
6b'). Therefore, the null hypothesis of no significant di Iference is rejected. Thus, there is a significant
difference between the performances of firms whose strategic control are high and the performance of
firms whose strategic control are low.
5. Conclusions and Implications for Management

In present times, manufacturing remains one of the most critical engines for economic growth. It acts
as a catalyst to transform the economic structure of countries. However, the success of firms in
performing these roles is partly a function or strategic control. Firms need to understand the
consequences of strategic control so as to adopt it to become competitive and increase their
performance level.
European Journal of Social Sciences - Volume 22. Number 2 (2011)
Nevertheless, the results of the study revealed that on the average, participating firms scored
low in strategic control. The low involvement was probably because the firms were unwilling or lack
the capacity to constantly monitor their strategies to see whether the strategies were effective or not.
,......-Thisimplies the possibility of the firms not being critical about strategic control, and unwilling to keep
pace with the changing business environment and demands of the strategy implementation process.
The findings of this study revealed a significant relationship between strategic control and
corporate performance. It also indicated that firms with high strategic control outperform firms with
low strategic control.
This study provides important impl ications for the management of manufacturing
organisations. In order to improve corporate performance, manufacturing firms need to demonstrate
high level of commitment to strategic control. This study can also help researchers to better
understand the relationship between strategic control and corporate performance in the manufacturing
industry in Nigeria. Hence, if the manufacturing sector must survive, grow and be competitive, its
managers should encourage increased involverneut in strategic controls activities.
5.1. Limitations and Future Research Direction

Limitations of this study should be acknowledged. First, this paper does not offer the sufficient
diversity required to enable generalization. This study focused on the manufacturing industry. Rather
than limiting them, future studies may need to expand to cover the service industry.
Second, future study should also consider the analysis of firm size and firm age, and their
impact on strategic controls. These might be relevant and imperative in making policy decisions for the
firm.
Third, future research to examine the effect of corporate performance on strategic control might
also be considered.
Finally, the sample was taken from Lagos State, Nigeria. This limits the generalization of the
findings. Hence, the suggestion that future research should extend the study to cover the entire country.
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ISSN: 1451-243X Issue 11 (2011)
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Growth, Sustainability and Inhibiting Factors of Family Owned

Businesses in the South East of Nigeria
Ifekwem, N. E.
Department of Business Administration, University of Lagos
Akoka- Yaba, Lagos, Nigeria
E-mail: nkyifek@yahoo.com
Tel: +2348033253217
Ogbojafor, B. E. A.
Kuye, O. L.
Absrtact
This paper presents and, discusses the various challenges in family owned
businesses in the South East of Nigeria. The attitudes of business owners in the region and
inadequate planning often lead to the limited life span of most businesses. The responses
from two hundred and fifty small business owners/executives in the South East of Nigeria
confirmed that family owned businesses suffer many management and attitudinal problems
ranging from individualistic spirit, lack of planning and basic information, lack of political
awareness, wrong line of business, and poor book keeping among others. The implication is
that businesses start and fail, rarely succeeding the owner. It is strongly recommended that
business owners should invest heavily in training and courses locally and abroad to
sensitize, orientate and change their mindset as well as adequately develop their
management skills and abilities. It is also imperative for business owners to adequately
scan the Nigerian business environment so as to identify the opportunities and threats
therein, and develop the various techniques that will help them to adapt to the changing
environments as they emerge.
Keywords: Growth, Sustainability, Family-Owned Business,
1. Introduction
Nigeria is a country made of thirty six states and zoned into six geopolitical zones namely: North West,
North East, North Central, South East, South West and South South Zones. The South East of Nigeria,
one of the geo-political zones, is made up of five states namely Enugu, Anambra, Ebonyi, Imo, and
Abia. They are predominantly Igbos, ethnically. Igbo culture impacts the enterprise culture. The Igbo
individual is that equalitarian and republican who is very enterprising but without firm economic base
and economic power and also lacking in political power and perspicuity. He does not have all it takes
to operate, compete and succeed in present day Nigeria (Nwankwo 2000).
149
In the journey of Nigeria's first generation entrepreneurs, the early Igbo tycoons like
Odimegwu Ojukwu and others who went from produce buying to becoming a transportation magnate
made sizeable fortunes. It is true however that few of the early wealthy families have been able to
sustain wealth past one generation, many of the ventures have in fact failed rather than change
ownership (Utomi 2008).
Developing economies like Africa and Asian countries have come to realize the value and
significant role family owned businesses play in their economic development. In these countries, much
of the entrepreneurship activities and wealth lies with family owned businesses hence, they are
becoming the fastest growing sector of the economy. They are seen to be characterized by dynamism,
witty, innovations, efficiency, and their small size allows for faster decision making process. In some
countries many of the largest publicly listed firms were family owned. Indeed, Charkrabarty (2009)
maintains that many businesses that are now public companies were family businesses.
A family business is a business in which one or more members of one or more families have a
significant ownership interest and significant commitments towards the business' overall well being
(Charkrabarty, 2009).
According to Charkrabarty (2009), a firm is said to be family owned if a person is the
controlling shareholder, that is a person (rather than a state, corporation, management trusts and mutual
fund) can gamer enough shares to assure at least 20% of the voting rights and the highest percentage of
voting rights in comparison to other shareholders.
Family business may have owners who are not family members. Family business may also be
managed by individuals who are not members of the family. However, family members are often
involved in the operations of their family business in some capacity and in smaller companies usually
one or more family members are the senior officers and managers.
Nwankwo (1990) is of the opinion that when family business is basically owned and operated
by one person, he or she usually does the necessary balancing automatically. For example, the founder
may decide that the business needs to build a new plant and decide to take less money out of the
business to live on for a period of time in order for the business to generate the cash needed to expand.
In making this decision, the founder is balancing his personal interest (taking cash out) with the needs
of the society (expansion).
The people of the south East of Nigerian are believed to be hard working and enterprising, and
family owned business is a common phenomenon in this part of the country. The question is how many
of these businesses survive the founders? There is probably a high level of small business failure in the
South East of Nigeria. Factors responsible for these failures may include poor management, lack of
basic information and planning, wrong line of business, poor book keeping, and inadequate start-up
capital, among other environmental factors. Since the vital aspect of any business is its survival and
growth, this paper examines the necessary strategies for the survival and growth of family owned
business (FOB) in the South East of Nigeria. The study, among other things, examines succession
planning, management, finance, internal and external environment of business, and other challenges
that family owned businesses face.
2. Review of Literature
2.1. The Role of Family Owned Business in Economic Development
Many management and economic theories and concepts are relevant III discussions of economic
development without the exclusion of developing countries.
The developing economies including African nations are yet to attain technological and
industrial threshold. Most African countries generally have remained increasingly poor in spite of their
abundant resources with incidence of poverty rising from 28.1 % in 1980, 65.6% in 1986 and further to
70.6% in 1999 (Neshamba, 2004). Even now, the trend has not changed. For any meaningful economic
150
development to take place the trend must be reversed and strategies for development must take into
account the people's historical socio-cultural and institutional realities.
In making a case for planning African economies, Neshamba (2004) argued that meaningful
economic development must aim at total transformation of the entire economy from traditional
subsistence society to a modern monetized, industrial and self sustaining economy. This transformation
can only be achieved if the small-scale enterprises (family owned businesses included) are encouraged
to grow through the provision of the badly needed financial and other resources.
The Central Bank of Nigeria (CBN) in its monetary policy circular No. 36 declares that the role
of small scale enterprise (FOBs inclusive) in employment generation, skill acquisition, output growth,
enhancement of local technology and mitigation of rural - urban drift cannot be over emphasized
(CBN, 2002). The few large scale multinational companies, state corporation etc where they exist have
failed to provide employment to teeming unemployed Nigerians. For example, in Nigeria, the frequent
upheaval in the oil rich Delta region caused by dissatisfied and frustrated youths of the locality is a
manifestation of the failure of the multinational companies. If the impact of these multinational
companies can not be felt in the localized operational areas, their capacity in providing the catalytic
impetus needed for national economic development becomes very much in doubt.
Family firms introduce dynamic personalized control that is different from the institutionalized
control in non family firms, significantly affecting the strategic orientation and processes of these firms
(Charisman, Chua,and Sharma, 2005).
2.2. Financing Family Owned Business and Sources

All businesses, not withstanding size, need adequate funds for start off and for healthy operations.
Most family owned businesses like many small scale enterprises have greater disability in sourcing the
required funds because of institutional inadequacies, their inability to provide necessary collateral and
access the capital market.
Finance is an indispensable ingredient in any business establishment, the size not withstanding.
It is the life wire that determines the success or failure of the business entity; a lubricant that insures
the proper functioning of the system. Ardener (1995) reiterated that every new business requires
finance to get started just as existing ones need the same for expansion and growth.
Sources discussed relate to both new and existing family owned business and are broadly
classified into internal and external sources:
Internal Sources
Ardener (1995) asserts that whatever the form of business organization, the promoters are required
both by business ethics and commercial prudence to provide reasonable part of their start up capital.
The types and sources of their contributions to the new venture depend on the type and legal form of
the business organization. So, in family owned businesses, the owners majorly rely on what they can
provide. For a more formal organization such as cooperative society, internal sources of funding
include share capital contribution, thrift savings, special deposits and loans from members etc
(Akeredolu-Ale, 1975). According to Akeredolu-Ale (1975), retained profit accounts for half of the
total finance used by the business sector in recent times. In business the undistributed profit constitute
dominant source of internally generated fund. '
External Sources
For small scale businesses in Nigeria, important external sources of fund include trade credits, short-
term loans/credits, factoring and prepayment. Trade credit is in effect a loan made by supplier when he
delivers goods to the buyer in anticipation of payment at a future date to the extent that goods delivered
do not have to be paid for on receipt. The company receiving the goods obtains credit for the period
allowed before payment. Odueyungbo (2006) asserts that trade credit constitute the largest source of
short term finance for business firms collectively. However, trade credit carries some costs which have
151
to be considered. Besides building higher prices, trade credit carries opportunity cost in terms of cash
discount foregone. There is also possible deterioration in credit rating or loss of future credits as a
result of stretching accounts receivable beyond the net period allowed. Another source of external
funding is bank credit facility which may be overdraft or loan. Such facility could be granted on clean
basis or against security depending on the company's asset base, the operating level and results, the
integrity of key officers and associated accounts.
2.3. Environmental Strategy in Family Firms

A firm's environmental strategy is referred to a firm's strategy to manage the interface between its
business and natural environment (Kanter, 2009). Family involvement and unique family dynamics
impact organizational strategy and performance (Sharma & Sharma 2011). Environment strategies
focus on meeting legal requirements and implementing pollution controls. Family businesses pursuing
such strategies are driven by instrumental factors such as avoiding legal sanctions or penalties and
negative impacts on a firm's image or reputation (Russo & Fonts 1978 in Sharma 2011).
Sharma and Sharma (2011) argue that family involvement in business influence the attitudes,
subjective norms and perceived behavioral control of a firm's dominant coalition. In non family firms,
it is very difficult to link individual level beliefs, values and attitude with organizational level strategy
without examining processes that translate these beliefs into deep rooted and pervasive organizational
and cultural change. In contrast, in family firms, the long tenure of the leadership and the controlling
family influence on the firm's dominant coalition allow easier permeation of individual and family
values into the firm's resource allocation decision.(McConaughy2000).
2.4. Typology of Family Firms

Indications are that the kind of assumptions made by a family and their behaviour can generate a
certain orientation in a family firm. Ward (1987) opines that the differences are strong enough to
warrant the development of a typology of family firms. Table 1 below depicts the postulated
assumptions in family and business oriented family firms at the boundaries of Ward's continuum.
Table 1: Likely Assumptions and Situations in a Family First Group Vs Business First Group
1 Family Assumptions
Family First Group , Business First Group
Are more rigid in their views. A rigid family Are less Rigid in their views. More likely to allow things to
struggles to prescribe the rules of the game as well as evolve.
its outcome control. Are more likely to take risks. Crave to preserve the spirit of
Are less likely to take risks. Would like to maintain risk taking that sparked the business initially.
business in its present condition. Are more likely to strategically plan.
Are less likely to strategically plan. Believe in 'equality of opportunity'. Believe that after a
Believe in 'equality of results'. Provide each child certain point individuals should make their own way in the
the same chance, regardless of ability. Job as a world and deserve no extra help in the supply of jobs for the
birthright. family.
Dependence. Think geographical separation implies Independence. Grant each member freedom to follow own
emotional separation and is therefore a bad idea. path.
2 Family and Business Situations
Family first Group Business First Groun
(i) Smaller Business Wealth. (i) Larger Business Wealth.
(ii) Smaller Business Size. (ii) Larger Business Size.
(iii) Fewer Family Members. (iii) More Family Members.
(iv) Low-Tech Business. (iv) High-Tech Business.
(v) More need for personal service (v) More need for invention I research
Source: Adapted from Ward (1987)
152
Ward (1987) argues that the situations of the firm and family can influence the orientation. If,
for instance, the firm is small and the family is large, a business orientation must prevail. As the table
indicates, Ward suggests that business income, size, technology and necessity to innovate along with
the number of family members working in the firm impact on the orientation
3. Methodology
Face to face interview was carried out with two hundred and fifty small business executives in Onitsha,
Anambra State and its environs to find out the challenges they face operating family businesses.
Interview was done individually and in groups. Onitsha is a major business town in the South East
where business people from all the five states of the zone are represented.
For the purpose of sample selection, efforts were made to ascertain whether there was a
comprehensive and up to date official list of small businesses in Onitsha but none was available.
Therefore, quota sampling became an option. Onitsha and it environ, with numerous markets and
business outfits, were divided into five zones and assigned to five Research Assistants. Each of them
was mandated to directly administer copies of the questionnaire on the respondents in her zone.
Samples were spread out across the entire zones and efforts were made to ensure that the variety of
small businesses (for example in terms of size, type of product and type of business) were included.
There was a hundred percent response rate due to the fact that the responses were taken directly
by the research assistants.
4. Findings and Discussions

The research revealed some factors that could slow down the growth or cause the failure of family
owned business in the South East, Nigeria:
4.1. Lack of Basic Information and Planning

The ability to carry out a successful business plan is still lacking in most family owned business in the
South East of Nigeria, and this act as impediment to their survival and growth. Planning as the key to
every business be it small or big, new or old was very much absent. The study revealed that 193 out of
250 (77%) started their business without any formal documented business plan. Each business plan is
peculiar to its nature of business and will be different from others (Burns 2007) Lack of planning
influenced most family businesses to register as small businesses with the consequences of being put in
high tax brackets. Authorities charged with the duties of facilitating the creation of small businesses
instead use loopholes created by the small business persons themselves to siphon monies from them,
thereby scaring many businesses from registration.
In the course of this research different reasons were given by the respondents for not planning
their businesses. Some said it was expensive, others said they were discouraged by government
policies, while majority complained of lack of knowledge and complexity of information to be
analyzed. They also argued about the possibility of rigidity. That is, after having invested in planning,
there will be resistance to abandoning it considering the inconsistent Nigerian Business Environment.
Agreed that planning is expensive, but literature suggests that planning is a good management
practice and beneficial to business (Gibson, and Cesar 2002) and a road map (Burn 2007). Business
plan as a well analyzed piece of information relating to the opportunity eliminates uncertainly and so
reduces risk (Wickman 2001).
Oghojafor (1997) asserts that planning is a formal process whereby specific objectives are set
and detailed resources together with ways or method of accomplishing these objectives are established.
He also maintains that planning involves an advance consideration and arrangement of what is to be
done and how it is to be done.
153
4.2. Lack of Political Awareness
The findings revealed that a typical Igbo business man has a lot of apathy to governance and what is
happening in government, not realizing that politics is who gets what, where and when. In support of
the findings, Nwankwo (1990) asserts that the Igbo man cries and complains of marginalization, and
his mindset convinces him so. He alienates himself from the Nigeria socio-political chess board,
concentrating only on his business, thereby separating business and politics which hitherto should go
hand in hand. The Igbo business man, the Chinese of South East Asia, the Vietnamese and Jews in
America, as people, are usually unable or unwilling to get involved in politics and other social prestige
activities, rather they become obsessively involved in economic pursuits, something Utomi (2008) calls
"the emigrant economic ethic".
Politicization of the institution charged with the duty of facilitating small medium enterprises
(SMEs) in Nigeria has contributed in impeding the growth and survival of family owned Business in
the South East, Nigeria. Most national institutions charged with the responsibility of promoting SMEs
were promoting party politics instead. This undermines the government's effort to facilitate the growth
and survival of these businesses.
In selecting people for small business financial assistance, selection is based on personality
rather than ability. This often stimulates corruption. Whereas, Evans and Leighton (1989) point out that
whoever becomes a business person is decided not by personality but by entrepreneurial ability and the
incentive systems.
4.3. Individualistic Spirit I Orientation to Joint Stock Enterprise

From the study, many other factors found to be responsible for this short coming include individualistic
spirit, lack of trust, and power tussle (since everyone want to be the leader - Managing Director)
among others.
Utomi (2008) emphasizes that Igbo tradition of individualism make them more easily attuned to
markets and free enterprise orientation. Utomi further stated that whereas Igbo people did not take the
sense of community to the collective extreme that is discouraging individual venturing into institution
building that should provide strong pillars for continuity in business. This position was supported by
78% of the respondents who vow to maintain individualistic spirit as against sense of community. They
strongly argued they would do better being alone in business than in joint business.
Due to the individualistic spirit and for the fact that resources are not pulled together, most
family businesses in the South East are devoid of modem scientific business practices and effective
succession to corporate status with an apparatus of modem business management practices, corporate
vision and objectives of progress or profit, survival and development (Nwankwo, 2000). Furthermore,
Nwankwo believes that what today parade as Igbo Business men, are petty traders, single one man
businesses or family businesses that do not operate on modem line. They have limited life spans
because of lack of succession, the business fall sick when their owners fall sick, and die when their
owners die. '
Utomi (2008) further stressed the need for joint stock enterprise when he lamented that there
must be something in the DNA of Igbo man that makes it difficult for them to run joint stock
enterprises. According to him, if you left enterprise at the level of the owner and his children (for
instance, Okeke and sons), it would be fine, but once others have an interest in the venture, crises
become imminent. Serious work has to be done to initiate Igbo man into governance culture for joint
stock enterprise to enable all become more comfortable with pooling resources in building better
capitalized companies that can win the big battles of wealth creation. Such companies have a better
chance of succeeding their owners.
154
4.4. Inadequate Startup Capital
Financing family owned business and sources of fund has been extensively discussed earlier since
finance is the life wire of any business. This Research confirms that most of the businesses were started
with inadequate capital. This significantly contributed to financial problems and quick exit of many
family owned businesses. Majority of them (75%) were found to have their start capital from personal
savings and contributions, some from short-term loans since getting long term loans from the bank was
difficult due to lack of planning that meet the bank's requirement. According to Burns (2007), to obtain
a bank loan, the business owner will need to establish a relationship of trust and respect and also
present the bank with a business plan. Most Igbo family businesses are started with little money, they
rely on hard work and it takes them a long time to succeed. These beliefs were found to have enslaved
most of them, forcing them to engage in many forms of odd jobs and irregularities during business
operation to earn money and inject in the business which consequently make business performance
difficult to evaluate.
Most times the correct amount of start up capital may not be identified due to poor book
keeping and this is important to bridge the initial gap between existing knowledge and resources
necessary for business survival and growth. Levitskey (1996) states that most business learning takes
place during the process of startup requiring finances. Thus it is extremely important that the start up
capital is well calculated to provide for occasional surcharges.
4.5. Record Keeping

Book keeping helps to generate information needed to manage a business. Though, book keeping does
not contribute directly to business profit, its importance cannot be undermined. This research
discovered that most family owned businesses in the South East of Nigeria (74% of the respondents)
do not maintain any form of accounting records and those who tried to keep records keep misleading or
haphazard record. The reasons for not keeping records are attributed to fear of high tax and mostly
ignorance of the need. The absence of good book keeping makes the evaluation of business progress
difficult both for the family business and the authorities concerned.
Booking keeping is very important since people require information in order to assess whether
they should confer legitimacy to a given business outfit. When a society does not understand how a
small firm earns its progress, they misinterpret the business the way they like. This can be devastating
especially in African society where business progress or failure is very often associated with
superstition. Isidro (2006) confirms that good record keeping over performance, basic information and
planning help to keep the business in track avoiding all ills that can result in high taxes and high
inventory holding costs.
4.6. Attitudes towards Human Capital

Human capital if well utilized goes a long way in enhancing business ventures. According to Utomi
(200S) most Igbo entrepreneurs are penny wise pound foolish where the deployment of human capital
is concerned. He stated that there are empirical evidence of the low quality and high turnover of staff in
most family businesses in the South East. Considering that labour is cheap and abundantly available,
these entrepreneurs hire the unskilled, pay them poorly, invest in training them to get the 'job done
while the staff see themselves as just managing until they find a better job. Once they find something
better they move on and the various circle of investing in training continue at the business. This has
proved to be very expensive for the businesses that do not seem to realize they would save a lot if they
invested more in hiring the right people and paying them well so that they stay much longer and the
firm profits from deploying & hiring quality human capital with attendant productivity gains. Most
respondents (7S) admitted they use mostly family members who may be ill qualified or ill skilled.
155
4.7. Wrong Line of Business
Many family owned businesses were found to be in the wrong business and this resulted in capital
shortages. Carter (1982) argues that many businesses fail because the line of business is not well
chosen to fit the climate prevailing in the economy during that time.
Isidro (2006) stresses the importance of understanding the need of the business environment.
Opportunity identification has to relate ,to the requirements of the environment. Isidro further advise
that the first requirement for being a successful business person consists in choosing lines of business,
where this does not happen the business suffers. In the course of this research, it was revealed that
many family owned businesses seldom carry out feasibility studies to enable them identify the need of
their business environment, to enable the choice of an appropriate business line. 60 percent (150
respondents) of the businesses were started without any feasibility study. For example in the course of
this research a case of an inappropriate business line was discovered. There is this family owned
business outfit that carried a heavy stock of motor spare parts for sale in a remote environment where
most people use bicycles and few motorcycles. Only the traditional ruler, a medical doctor who runs
the only clinic in the village and the principal of the community secondary school own cars. When
asked "Why did you decide to start selling motor spare parts here? He gave the following answers:
"I spent four years with my Uncle in Lagos learning trade on motor spare parts. At the death
of my uncle, I could not afford to pay for a shop in Lagos hence I decided to relocate to the village
but since a year ago when I stocked the goods only one or two has been sold, I do not know why
business is not moving here".
It is obvious that the above respondent went into a wrong line of business. He could as well
learn a trade on bicycle parts or some other product that is needed in the environment. The
consequence of wrong line of business is always financial crises as cash is tied to inventory.
4.8. Lack of Secession Plan

This research was able to identify the non-availability of succession plan in most family businesses. 70
percent of the respondents have no plans on who succeeds them. Those institutions which would have
deepened the roots of enterprises seem to be compromised by attitude towards use of professionals.
Professionalizing business succession and planning, trust in ownership structure that makes a broad
block of stakeholders committed to ensuring smooth transition of enterprise leadership from one team
to another (Utomi 2008).
Utomi (2008) further stated that modern successful enterprise go through certain processes that
involve three main activities: opportunities identification, commercializing the venture and
institutionalizing the venture. This research observe that the entrepreneur of the south east of Nigeria
tends to do well on the first two and due to lack of succession plan the business is rarely
institutionalized. It was identified that most Igbo family businesses are like one man business that do
not operate on modern lines; they have limited life span because of lack of succession. These
businesses fall sick when their owners fall sick and die when the owners die. Due to lack of succession
the businesses hardly survive their promoters or owners.
Table 2: Response to the Questions on the challenges that slow down the growth of Family owned businesses
in the South East of Nigeria. .
Frequency Percentage
Lack of basic information 193 77
Lack of Political Awareness 180 72
Individualistic Spirit 195 78
Inadequate Set up capital 175 70
Book keeping 185 74
Attitude towards human capital 195 78
156
Table 2: Response to the Questions on the challenges that slow down the growth of Family owned businesses
in the South East of Nigeria. - continued
Wrong line of business ISO 60

Lack of succession lan 175 70
N=250
Source: survey, 2011
5. Conclusion, Implication and Policy Recommendation

An economy that is made up of businesses that have limited life spans, absence of corporate culture
and growth structure can neither progress nor survive the vicissitudes of local and global competition.
An economy characterized by berserk individualism, atomization of growth pillars and perverted value
systems surely has no place in the evolving globalization of the 21st century characterized by mega
conglomerates. There is the need for both policy makers and small business owners to address the issue
raised. There should be a change of focus, a change of mindset and a change of the paradigm of
policies and approaches hitherto pursued. This can only be achieved with appropriate programmes.
There are a number of growth and development implications of this research. For family owned
business in the South East of Nigeria to grow, the research suggests that there is a relationship between
business planning, owner's attitude and performance.
The findings suggest an orientation and educational programmes to change the mindset of
business owners to enable them graduate from atomistic sole proprietor, family business devoid of
modem scientific business practice and effective succession to corporate status with an apparatus of
modem business management practices and corporate vision. It further suggests some imperatives for
policy makers concerned with promoting small business growth and sustainability in the South East.
This has implication for the welfare and economic growth of the zone, Nigeria at large, and the much
publicized fight against poverty.
Government needs to motivate small business persons. They should be empowered to enable
them identify business opportunities. Getting the right information about business opportunities is an
area that the government needs to motivate family and small business owners. The awareness must be
created. Such information outlets should be given wide publicity. In a developing nation like Nigeria,
small businesses cannot be ignored. They contribute enormously to the economy and need to be
strengthened.
References
[1] Akeredolu-Ale, E. (1975) "The Underdevelopment of Indigenous Entrepreneurship in Nigeria,
Ibadan, Ibadan University Press
[2] Ardener, S. (1995) Money-Go-Round: The Important of Rotating Savings and Credit
Associations for Women Oxford Press Oxford
[3] Bums, P. (2007) Entrepreneurship and Small Business Palgrave Macmillan Stations World net,
and the Web, htt://s,a,busine"sscool.org
[4] Carter (1982) In Bums Paul a~d Dewhurst (1986) 'Small Business and Entrepreneurship"
Macmillan press U.K
[5] Chakrabarty S. (2009) The influence of National Culture and Institutional Voids on Family
Ownership of Large Firms: A country Level Empirical Study [htpp:llpapers.ssm.com
/so13/papers.cfm? Journal of International Management. 15[1]
[6] Chrisman, J.J., Chua, J.H., and Sharma, P. (2005). "Trends and Directions in the Development
of a Strategic Management Theory of the Family Firm. Entrepreneurship Theory and Practice.
[7] Evans P and Leighton (1989) Empirical Aspect of Entrepreneurship. American Economic
Review 79, pp. 519 - 35 USA.
157
[8] Gibson, B, and Cassar, G. (2002) Planning behaviour Variables in Small Firms - Journal of
Small Business Management 40(3), pp. 171 - 186.
[9] Isidro M (2006) Choosing a Business: Learn how to evaluate your business idea published by
Power, homebiz.com
[10] Kanter, R.N. (2009), "How Vanguard Companies Create Innovation, Profits, Growth and
Social Good". Crown Publishing Group New York.
[11] Levistsky J. (1996) Small Business in Transition Economies: Promoting Enterprise in Central
and Former Soviet Union London. Intermediate Technology UK."
[12] McConaughy, D. L. (2000). "Family CEOs VS Non Family CEOs in the Family Controlled
Firm: An Examination of the Level and Sensitivity of Pay to Performance". Family Business
Review 3, pp. 121 - 131 '
[13] Neshamba, F. (2004) Business Support Services for Small Firms: Have the Providers got it
right? Paper presented at the A91h International council for small businesses (ICSB) in
Johannesburg - South Africa June 20 - 232004
[14] Nigerian Business Info. Corn 2001
[15] Nwankwo G. O. (1990) The Igbo man in the Political Economy of the Fourth Republic
Evergreen Associate P. 1. Lagos.
[16] Nwankwo G. O. (2000) Rethinking the Igbo man Evergreen Associates Lagos
[17] Odueyungbo, F. (2006) Business Management: A Practical Approach. Nolachild Associates,
Lagos
[18] Oghojafor, B. (1997), Multiple Choice Questions in Management with Notes. Malt House Press
Limited Lagos
[19] Sharma, P. and Sharma, S. (2011) Drivers of Proactive Environmental Strategy in Family
Firms. For Publication Consideration in the Special Issue of Business Ethics Quarterly 2011
http://www .pdcneLorg/pdfs/forthcominglBEQ21- 2 6.pdf Assessed 1SI February 2011
[20] Utomi, P. (2009) "Why Great Igbo Family Business Fail" Being Text of Paper Delivered at the
South East Economic Summit -l)aily Sun Mon Dec. 22 2008.
[21] Ward, J.L. (1987) "Keeping the Family Business Healthy", San Fransico, Jossey Bass.
[22] Wickham, P. A. (2001) Strategic entrepreneurship. Prentice Hall.
158

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European .Jou, i),11 ':1 v"~ iq\ ;;i;j:~'I";CS

Editorial Advisory Board

Aims and Scope

philosophical, ami socmt S('C1l,I, I . - '.I!f_.: J, I ,.·'11 as frarn cultural

regarding the submission pi or.: ss ple"",~ s,~pd an email to

Current and Past Issues

Volume 10 No 3 October 2009

Earlier issues are available only to subscribers.

Strategic Control and Corporate Performance in the

! Keywords: Nigeria; strategic control; corporate performance; manufacturing industry;

2.1. Types of Strategic Controls

2.1.1. Premise Control

not. If, at any rime, it is felt that the commitment or

2.1.3. Strategic Surveillance

2.1.4. Special Alert Control

4.1.2. Corporate Performance

4.2. Analytical tools and Hypotheses Tests and Results

Table 1: Demographic profile of respondents

Table 2: Demographic profile of firms

Table 3: Mean index of strategic control

Table 4: Mean index of corporate performance

Table 5: Regression Analysis of strategic control and corporate performance

Table Sa: Model summar

Table 5b: ANOV A

Table Se Coefficients ----.-

I' < 0.05

5. Conclusions and Implications for Management

5.1. Limitations and Future Research Direction

Editorial Advisory Board

Growth, Sustainability and Inhibiting Factors of Family Owned

Keywords: Growth, Sustainability, Family-Owned Business,

2.2. Financing Family Owned Business and Sources

2.3. Environmental Strategy in Family Firms

2.4. Typology of Family Firms

4. Findings and Discussions

4.1. Lack of Basic Information and Planning

4.3. Individualistic Spirit I Orientation to Joint Stock Enterprise

4.5. Record Keeping

4.6. Attitudes towards Human Capital

4.8. Lack of Secession Plan

Wrong line of business ISO 60

5. Conclusion, Implication and Policy Recommendation

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