BUDGETING EVALUATION AS A TOOL FOR EFFECTIVE CONTROL IN THE PUBLIC SECTOR
1.1 BACKGROUND TO THE STUDY
Increasing competition compels organizations to consistently adopt more efficient procedures and reduce their profit margins. Highly capitalized industries must utilize their resources in the most efficient manner. However, firms must also adapt to quickly changing client demands and supply chain situations. Therefore, the key to achieving operational excellence is in the efficient and adaptable management of resources, which entails managing and scheduling people, processes, vehicles, equipment, and materials such that utilization is maximized and company objectives are met.
Rowden (1995) defines resources management as the practice of utilizing an organization’s resources in the most effective manner feasible. These resources can include material resources like commodities and equipment, financial resources, and human resources like personnel. Resource management can encompass concepts such as ensuring that a business has sufficient physical resources, but not so many that items go unused, and assigning duties to employees so that they are kept active and do not have too much downtime.
The wealth of any organization is defined to a substantial degree by its human capital. It is impossible to overstate the importance and value of human effort as a resource for any organization’s operational productivity, efficiency, and effectiveness. The development and maintenance of well-trained, talented, experienced, and high-quality human resources who will carry out the various tasks of the company becomes an issue of significance as a result of this capacity building.
Inadequate and inefficient management of human resources is one of the key obstacles to organizational growth. It was therefore not surprising when the third national Development Plan of the Osuji 1975 – 1981, as accurately documented by Zahradeen (1980), stated that the successful implementation of a development plan, whether at the organizational or national level, depends not only on the availability of financial and other capital input, but more importantly on the adequacy of well-trained and managed human resource in various occupations.
According to Ugbana (1986), the majority of companies, both public and private, are beginning to recognize the importance of material management. In the majority of organizational balance sheets, materials account for approximately seventy percent (70%) of total expenditures, while cash accounts for twenty percent (20%) and other forms of organizational expenditures account for ten percent (10%). Despite the fact that cash represents the largest proportion of an organization’s resources, it is surprising to discover that the majority of businesses provide currency with a higher level of protection than materials.
This should not be the case; the lion’s share of an organization’s resources should be adequately protected and handled by skilled and efficient staff (Ammer 1996). At the end of the 20th century, many organizations recognized the importance of materials, and the majority of material activities were performed by autonomous departments, such as purchasing, warehousing, stock control, and distribution, which simultaneously caused challenges.
Recent years have witnessed a number of significant developments in Nigeria’s managerial capabilities and financial management operations. Distinguished Nigerians of varying stature have addressed the failing trend in financial management of businesses in Nigeria from a variety of vantage points; for example, the banking industry has been plagued by fraud, mishandling of funds, and poor overall performance. Inadequacies in financial management were caused by these issues and others.
Analysts have categorized these characteristics in a variety of ways as impediments to effective financial management and growth in Nigerian privately held businesses.
As development progresses and the structure and organization of the economy become more complicated, the failure of financial management guarantees an increase in complexity. As numerous elements have been found, it will be possible for the researcher to inquire as to how and why these reasons have emerged. What are the prerequisites for effective financial management?
In light of this, the researcher studies the impact of resource management on organizational development.
Power Holding Company of Nigeria (PHCN) Plc: A Brief Historical Overview
Electric Power Development in Nigeria began in the closing years of the 19th century, when the first generation plant was installed in the city of Lagos in 1898. From this date onwards and until 1950, the pattern of electricity development was established in various towns, some of which were under the jurisdiction of the Federal Government’s public works department, while others fell under the jurisdiction of the Native Authority and large Municipal Authorities.
The Government enacted Ordinance No. 15 of 1950 for Electricity Corporations of Nigeria in order to unify power development and make it effective. This ordinance centralized the administration of all public-sector and Native Authority or municipally-owned power enterprises. The Electricity Corporation of Nigeria, commonly referred to as ECN, then assumed legal responsibility for the production, transmission, distribution, and sale of electricity to all Nigerian consumers and customers.
Authority for Niger Dams
In 1962, a congressional act formed the Niger Dams Authority. The Authority was responsible for the construction and maintenance of dams and other works on the River Niger and elsewhere, generating electricity via water power, enhancing navigation, boosting fisheries and irrigation, and promoting fisheries and agriculture. The building of the Kainji Dam, which commenced in March 1964, was completed on time in December 1968.
Authority for Electric Power in Nigeria
In September 1969, the Federal military government decided to combine the Electricity corporation of Nigeria and the Niger Dams Authority into a single organization. A year later, the Canadian consulting firm Shawment Lurruted was tasked with investigating the merger’s technical aspects. By Decree No. 24 of 27th June 1972, the report was submitted in November 1971. (which become effective from 1 April, 12972).
The Electricity Corporation of Nigeria (ECN) and the Niger Dam Authority (NDA) amalgamated to form the National Electric Power Authority (NEPA).
The real merger did not occur until January 6, 1973, when a general manager was named. The decree mandates that the authority create and maintain an effective, integrated, and cost-effective system of power distribution for the entire federation.
Prior to the privatization programs that were implemented during the administration of former President Chief Olusegun Obasanjo, the corporation was privatized, and its name was later changed to Power Holding Company of Nigeria Plc.
1.2 STATEMENT OF THE CHALLENGE
The difficulty faced by the majority of organizations has created a threat to their development and achievement of their goals. This is due to fundamental problems associated with inadequate and inefficient acquisition, exploitation, and maintenance of its human resource.
Inadequate management of the human factor has caused the PHCN’s underutilization of human resources to create a catastrophic problem. Mismanagement is an additional significant issue affecting our business today, and it has reduced it to nothing as individuals are no longer connected to their work nor willing to assume responsibility for essential Resources.
The majority of public and private enterprises struggle to successfully manage their material resources from the point of procurement through the shops, issuance to user departments, and final product. For proper assimilation, these limited material resources must be used effectively.
The elements that contributed to or are accountable for the demise of different companies have distinct issues. Financial resource management is neglected, which has caused the majority of organizations to lose a substantial portion of their funds via these enterprises due to fraudulent acts, indiscriminate financing, poor management, lack of zeal and experienced personnel, and inability to utilize its financial potentials, etc.
The low quality and quantity of products have revealed that the quality of human and material resources deployed by businesses does not meet expectations, consequently reducing the productivity of the company.
1.3 PURPOSE OF THE EXAMINATION
The purpose of this study is to evaluate the impact of Resources management on organizational growth. The particular aims are as follows:
To determine the necessity for employee program development within an organization.
Determine how material resource management affects organizational development.
3. To identify Identifying the reasons for inadequate financial resource management
4. Identify and assess some of the material management issues facing an organization
To investigate the issue of enhancing employee productivity for efficiency
The significance of the study is that it demonstrates the need for an organization to continuously develop methods of resource management for organizational development.
The following constitutes the significance of the study:
a. It will aid managers in understanding the requirement for human resource training and development and ensuring that the appropriate number of skilled/trained personnel are available for employment at all levels of the company at the appropriate time.
b. The study will have a favorable impact on the rate at which resource can be utilized effectively and how it can lead to high productivity in the business.
c. Students who aspire to become material executives in the future view this course as a chance to research the field of human, material, and financial resource management in depth in order to understand the issues inherent therein.
d. It is also hoped that this research may aid future researchers of resource management and how it can lead to organizational development.
1.5 SUBSTANCE OF THE HYPOTHESES
The following hypothesis is formulated for this study’s purposes:
Organizational development is not substantially influenced by resource management.
Hi: The management of resources has a significant impact on organizational development.
1.6 SCOPE OF THE STUDY AND ITS LIMITATIONS
This study will analyze the impact of resource management on organizational growth. The focus of the study will be Power Holding Company of Nigeria plc. A company’s resources consist of personnel, materials, funds, and machines. This study will be limited to Human, Material, and Financial resources only.
Data were collected and utilized based on records obtained from the organization, and it only covered records from previous years, as pertinent information that was supposed to be obtained based on recent and current events was not provided due to organizational issues such as machine failure, mismanagement, fraud, etc.
Other materials, such as textbooks, journals, magazines, and Internet research, will serve as secondary sources of data for the research project.
The research was constrained by the study’s scope, as is typical for any research endeavor. The following are some of the limitations imposed on this research:
a. Financial limitation: this is considered to be the initial constraint faced by the researcher. Their prevented students from obtaining all of the data required for this research project. As a student, one always has limited funds available, which was one of the elements that prevented the researcher from proceeding further. This study effort’s comprehensiveness in obtaining all necessary information. A common example is the budget for traveling to various locations to obtain information and purchasing related literary textbooks that are not available in the school library.
b. Available data: Incomplete and inaccurate data contribute significantly to the complexity of conducting this research. As a matter of fact, this was due to the fact that the majority of senior staff members were either too preoccupied with their official duties to provide the researcher with the necessary time to gather information, or they were unwilling to do so, despite the fact that some senior staff members did cooperate.
c. Time constraint: this was the most significant limitation faced by the researcher, as the combination of rigorous institution-based training (lectures, individual and group assignments, tests, etc.) and research work made it virtually impossible to devote all the time necessary to complete this research.
1.7 DEFINITION OF TERMS
In order to avoid any type of ambiguity with regards to the terms used in this research, the following are optionally defined.
-Human Resource Planning (HRP): This refers to the process of placing the right amount of qualified individuals in the right position at the right time.
Productivity: productivity is the measure of how effectively resources are combined and exploited to achieve a set of results inside an organization. Productivity means achieving the best degree of performance with the least amount of resources expended.
Organization is the act of breaking work into manageable tasks or responsibilities, or organizing such responsibilities into official posts, delegating authority to each post, and approving appropriate personnel to be accountable for ensuring that the work is carried out according to plan.
Motivation refers to the mechanisms, both instructional and rational, by which people seek to meet their underlying desires, perceived needs, and personal goals, which activate human behavior.
Forecasting is the practice of projecting the future quantity of required personnel and the skills and competencies they will require.
Material Management is the grouping under one heading of all or a portion of the activities involved in the organization and use of materials employed from the need stage to the storage of produced goods.
Purchasing is described as the action of legally acquiring the goods, suppliers, and equipment essential for the running of an organization.
Sourcing refers to the examination and evaluation of suppliers and sources of supply.
Negotiation is a process of planning, receiving, and analyzing that both buyer and seller utilize to reach an acceptable agreement based on a shared understanding.
Expediting is the process of assuring the timely delivery of products to the correct location and time.
Purchasing Requisition: This is the form that is typically filled out when a department or store needs to purchase materials.
Issue: The issue is the withdrawal of items and surrender of some user-backed documentation.
Quality Control is the examination of products and services to ensure that they conform to established criteria.
Obsolescence: These are materials for which there is no demand due to the availability of a superior substitute or because they have fallen out of favor.
Stocktaking is the comprehensive process of confirming the quality balance of the entire store’s inventory.
BUDGETING EVALUATION AS A TOOL FOR EFFECTIVE CONTROL IN THE PUBLIC SECTOR