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THE INFLUENCE OF GLOBAL ECONOMY CRISES ON CORPORATE GROWTH STRATEGIES AND FINANCIAL PERFORMANCE OF QUOTED MANUFACTURING FIRMS IN ENUGU STATE
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Organizational change management includes growth plans, which may have an impact on a company’s operational scope and financial performance (Skalik, 2016). A company’s development necessitates changes in its management system, which necessitates change implementation methods. According to Skalik (2016), change implementation is the primary manifestation of internal organizational movement, the path of which is influenced by external and internal strategies and circumstances. Organizational change management includes growth plans, which may have an impact on a company’s operational scope and financial success (Skalik, 2016). A company’s development necessitates changes in its management system, which necessitates change implementation methods. According to Skalik (2016), change implementation is the primary manifestation of internal organizational movement, the path of which is influenced by external and internal strategies and circumstances.
Growth plans are important in business management because they enable a firm to select a course of action and decide how to accomplish its objectives (Gibcus & Kemp, 2003). Companies may use growth strategies to enter new markets, expand geographically, and quickly acquire cutting-edge technology, complementing talents, and core capabilities (Gilinsky et al., 2001). They enhance the worth of their owners or investors as a result of this. Merging with firms that are in financial trouble, on the other hand, has serious consequences for the existence of the company.
During global economic downturns, crisis contagion follows firms. As a result, companies’ growth strategies, as part of change management, may be vulnerable to financial and economic conditions, such as a recession. Some empirical data suggests that a company’s success is influenced by whether it pursues internal or external growth methods (Dugguh et al., 2018).
Companies may use growth strategies to enter new markets, expand geographically, and quickly acquire cutting-edge technology, complementing talents, and core capabilities (Gilinsky et al., 2001). They enhance the worth of their owners or investors as a result of this. Merging with firms that are in financial trouble, on the other hand, has serious consequences for the existence of the company. During global economic downturns, crisis contagion follows firms. As a result, companies’ growth strategies, as part of change management, may be vulnerable to financial and economic conditions, such as a recession. Some empirical data suggests that a company’s success is influenced by whether it pursues internal or external growth methods (Dugguh et al., 2018).
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STATEMENT OF THE PROBLEM
Global economic crises continue to be a major source of worry for businesses/ quoted firms and figuring out how to develop a survivor company amid a shock is of necessity. This alarming trend has a number of ramifications for business development plans and performance. It may cause managers to make illogical decisions, resulting in the loss of employees to rivals. Several companies have failed in past Global Economic Crises as a result of poor policy implementation. Nigeria’s business value fell by approximately 63 percent during the crisis years of 2007–2008, according to estimates; as a result, Global Economic Crises need a better understanding of the adjustments in management strategies and models, including growth plans, which need be implemented in order to buffer shocks in the event that crises recur (Roberto, 2008).
Growth strategies are important in business management because they enable a firm to select a course of action and decide how to accomplish its objectives (Gibcus & Kemp, 2003). Companies may use growth strategies to enter new markets, expand geographically, and quickly acquire cutting-edge technology, complementing talents, and core capabilities (Gilinsky et al., 2001). They enhance the worth of their owners or investors as a result of this. However, there is no strong empirical evidence that Global Economic Crises have an influence on the growth strategies and the financial performance of Nigerian quoted manufacturing firms. As a result, there is a knowledge vacuum. Thus, this study seeks to investigate the influence of global economy crises on corporate growth strategies and financial performance of quoted manufacturing firms in Enugu state.
OBJECTIVE OF THE STUDY
The primary aim of this study is to investigate the influence of global economy crises on corporate growth strategies and financial performance of quoted manufacturing firms in Enugu state. Thus, the following;
1. To determine the global economy crises that pose a threat to the growth strategies and financial performance of quoted firms in Enugu state.
2. To investigate the influence of these crises on the growth and financial performance of quoted manufacturing firms in Enugu state.
3. To proffer solutions that these quoted manufacturing firms can use to combat the global economy crises in order to boost growth and financial performance.
RESEARCH QUESTIONS
The following questions guide this research;
1. What are the global economy crises that pose a threat to the growth strategies and financial performance of quoted firms in Enugu state?
2. What is the influence of these crises on the growth and financial performance of quoted manufacturing firms in Enugu state?
3. What solutions can be proffered so as quoted manufacturing firms can combat the global economy crises in order to boost growth and financial performance?
SIGNIFICANCE OF THE STUDY
This study will be significant especially to quoted manufacturing firms in Enugu state as it will bring to the fore the global economy crises that pose a threat to their growth strategies and financial performance and will also provide solutions to ensure growth and an increase in financial performance. It will be an addition to the academic world as research on this work has not been conducted on any state in Nigeria prior this study.
SCOPE OF THE STUDY
This study will only cover the influence of global economy crises on corporate growth strategies and financial performance of quoted manufacturing firms in Enugu state. A selected number of quoted firms will be looked into as it will not be possible to look into all the quoted firms in Enugu state. The global economy crises that pose a threat to quoted firms will also be discussed in this study.
LIMITATION OF THE STUDY
The limitations encountered by the researcher during the course of this research was insufficient funds in order to carry out an in depth research and expatiate on concepts.
DEFINITION OF TERMS
1. QUOTED FIRMS: Simply refers to a publicly traded/held company who lists their securities in stock exchanges or OTC markets to raise funds through the sale of securities in the primary or secondary market.
2. FINANCIAL PERFORMANCE: Refers to a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues.
3. CORPORATE GROWTH STRATEGIES: Refers to an organization’s plan for overcoming current and future challenges to realize its goals for expansion.
4. GLOBAL ECONOMY: The economies of the world’s individual countries considered together as a single economic system.
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