ABSTRACT
The turbulent and often dynamic
state of firm’s operative environment compels its vulnerability to competitive
forces and often implies imperative of change in corporate culture for survival.
TOWS matrix model though applied in many manufacturing firms across the globe
in meeting the growing challenges of competition and need for superior
performance, have unfortunately not recorded equivalent results in Nigeria’s
manufacturing industries. The limited adoption of TOWS matrix model is
explained by a host of factors including firms’ organizational change culture,
managerial capacity, and the comprehensiveness of environmental scanning
elements.This study, therefore, assesses the prospects and challenges of
applicability of TOWS matrix model in manufacturing firms in Nigeria. The methodology of study was the descriptive survey research design.
The instruments used for data collection were the structured questionnaire,
interview schedule and empirical research findings from available related
literature. From a population of one hundred and ninety-two (192) registered manufacturing
firms found in the south east area of Nigeria, and a management level employee
population of 2,880 using a combination of Taro Yamane formula, Proportionate
Stratified Sampling (PSS) and Multi-Stage Stratified Random Sampling (MSSRS)
technique, twenty-eight (28) firms were eventually selected for the study, from
which four hundred and twenty (420) management employees where issued
questionnairewith 94.76% response
rate. The result of the study showed
existence of a positive and significant relationship between a firms’
organization change culture and her awareness of Tows Matrix model; firms’
human resource capacity and degree of application of TOWS matrix model;
improvement in the competitive capabilities of firms’ products in relation to
others in the best of class and application of TOWS matrix model in the past five
years (2004-2009); comprehensiveness of firms’ environmental scanning elements
and reliability of strategies formulated with TOWS matrix model; the low
adoption of strategic alliance as a strategic choice in Nigeria manufacturing
firms and extent of change resistance in firms. The study also showed prospects
of TOWS matrix model in Nigeria
manufacturing firms while revealing the challenges to its sustainable
application. The conclusion of the
study is that organisational culture, managerial development, comprehensiveness
and scanning of environmental elements and adoption of strategic alliance as a
strategic choice constitute critical imperatives in the application of TOWS
matrix model in Nigeria
manufacturing firms. The recommendation
of the study include: entrenchment of organizational change as a deliberate
corporate policy; improvement of firm’s awareness and intensity of adoption of TOWS
matrix; and development of firm’s managerial capacity. The study’s major contribution to knowledge
include: the development of an improved version of TOWS matrix model captioned ‘WEBBED
TOWS MATRIX MODEL’.
TABLE OF CONTENTS
Title page i
Approval ii
Certification iii
Dedication iv
Acknowledgements v
Abstract vi
Table of Contents vii
List of Tables xi
List of Figures xiii
CHAPTER ONE: INTRODUCTION
- Background of the Study 1
- Statement of the Problem 5
- Objectives of the Study 7
- Research Questions 7
- Research Hypotheses 8
- Scope and Area of the Study 9
- Significance of the Study 9
1.8 Limitations of the study 10
1.9 Conceptual definition of key terms 11
1.10 Operational definition of key terms 12
1.11 Organization of the Study 13
References 14
CHAPTER
TWO: REVIEW OF RELEVANT LITERATURE
2.1 Conceptual Framework 16
2.1.1 The Concept of Organisational change 16
2.1.2 Types of Organisational Change 17
2.1.3 Dimensions of Organisational Change 19
2.1.4 Forces of Change in Organisations 20
2.1.5 Organisations Change Resistance 22 2.1.6 Strategies for Managing Change in Organisations 23
2.2 Conceptual Definition of Strategy 25
2.2.1 Levels of Strategy 28
2.3 Organisational Culture and Strategy Relationship 37
2.4 Environmental Elements, Comprehensiveness and Scanning 39
2.5 Human Resource Capacity and Strategy Application 46
2.6 Competitive Strategy and Operation Strategy 47
2.7 The Concept of Strategic Planning 50
2.8 Theoretical Framework 53
2.8.1 Theories of Strategic Planning Models 53
2.8.1.1 Mintzbergs Model 60
2.8.1.2 Ansoffs Model 61
2.8.1.3 Steiners Model 62
2.8.1.4 Wheelen and Hunger Model 63
2.9 Strategy Formation Models 66
2.9.1 Synoptic Model 66
2.9.2 Adaptive Model 67
2.9.3 Synthesis (Synoptic-Adaptive) Model 69
2.10 Situational Analysis Models 69
2.10.1 Strength –Weaknesses-Opportunities-Threats (SWOT) Model 70
2.10.2 Critical Success Factors (CSF) Model 73
2.11 Matrix Models in Strategic Planning 75
2.11.1 Business Portfolio Matrix Model 76
2.11.2 General Electric’s (GE) Business Screen Matrix Model 78
2.11.3 Strategic Factor Evaluation Matrix Models 78
2.11.3.1 Internal Factor Evaluation (IFE) Matrix Model 79
2.11.3.2 External Factor Evaluation (EFE) Matrix Model 83
2.11.3.3 Internal – External (IE) Matrix Model 86
2.11.3.4 Strategic Position and Action Evaluation (SPACE) Matrix Model 87
2.11.3.5 Quantitative Strategic Planning Matrix (QSPM) Model 89
2.11.3.6 Grand Strategy (GS) Matrix Model 94
2.11.3.7 Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix Model 95
2.12 Review of Related Empirical Studies on Strategic Planning models-Firm’s Performance Relationship 105
2.12.1 Empirical Evidence of Adoption, Benefits,
Prospects and Challenges
of TOWS Matrix Model in firms 110
2.13 Summary of Related Literature Review 111
References 117
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 133
3.1 Research Design 133
3.2 Population of the Study 134
3.3 Sample Size Determination and Sampling Technique 134
3.4 Sources of Data 140
3.5 Instruments for Data Collection 140
3.6 Validity of the Study Instrument 141
3.7 Reliability of the Questionnaire 143
3.8 Administration of the Questionnaire 145
3.9 Method of Data Analayis 146
References 148
CHAPTER FOUR: DATA PRESENTATION AND
ANALYSIS
4.1 Introduction 149
4.2 Data Presentation and Analysis 149
4.3 Test of Hypothesis –I 163
4.4 Test of Hypothesis –II 170
4.5 Test of Hypothesis –III 176
4.6 Test of Hypothesis –IV 182
4.7 Test of Hypothesis-V 188
References 199
CHAPTER FIVE:
DISCUSSION OF RESULTS, SUMMARY OF
MAJOR FINDINGS,
CONCLUSION, RECOMMENDATIONS, CONTRIBUTION
TO
KNOWLEDGE AND SUGGESTION FOR FURTHER
STUDIES
5.0 Introduction 200
5.1 Discussion of Results 200
5.1.1 Discussion of Objective I 201
5.1.2 Assessment of Hypothesis I 202
5.1.3 Discussion of Objective II 204
5.1.4 Assessment of Hypothesis II 205
5.1.5 Discussion of Objective III 205
5.1.6 Assessment of Hypothesis III 208
5.1.7 Discussion of Objective IV 209
5.1.8 Assessment of Hypothesis IV 210
5.1.9 Discussion of Objective V 212
5.1.10 Assessment of Hypothesis V 214
5.2 Summary of Major Findings 216
5.2A Model Developed in this Research 217
5.3 Conclusion 219
5.4 Recommendations 222
5.5 Contribution to Knowledge 224
5.6 Suggestion for Further Studies 227
References 229
Bibliography 232
List of Tables
Table 2.1 Application of IFE Matrix Model at Amazon 82
Table 2.2 External
Factor Evaluation (EFE) Matrix Model for Morgan
Stanley
Dean Witter (MSDW) 85
Table 2.3 Strategic Position and Action Evaluation Matrix Model for Morgan Stanley Dean Witter (MSDW) 89
Table 2.4 Quantitative Strategic Planning (QSPM) Matrix Model for Pakistan State Oil Incorporated 93
Table 2.5 Empirical Studies on Strategic Planning Models – Firm’s Performance Relationship 106
Table 2.6 Summary
of Lisrel Analysis Generated Results based on
Davis
(2007) Study 111
Table 3.1
Computation of Number of Manufacturing Firms studied using
PSS/M.S.S.R.S procedure 136
Table 3.2
Proportionate Allocation of 28 Firms in the states studied 137
Table 3.3 Departments and Number of Management Employees used in the Study in the 28 firms 138
Table 3.4
Allocation of Questionnaire to 28
selected manufacturing firms 139
Table 3.5 Empirical Validity of the Study Instrument 142
Table 3.6
Summary Reliability Statistics
on items in the Questionnaire 144
Table 3.7 Number of Questionnaire Administered in the States 145
Table 3.8 Hypotheses and Stattistical Tools used for Analyses 146
Table 4.1 Return Rate of Questionnaire 149
Table 4.2 Analysis of respondents according to their departments 150
Table 4.3 Level of Respondents in Management hierarchy 150
Table 4. 4 Sex of Respondents 151
Table 4. 5 Respondents years of service in firm 151
Table 4. 6 Age of Respondents firms 152
Table 4. 7 Educational Qualification of Respondents 153
Table 4. 8 Firms Commitment to Strategic Planning 154
Table 4. 9 Extent firms embark on Organizational
Change as a Corporate Policy 155
Table 4. 9A Extent Organisations Resist Change 156
Table 4. 10 Relationship between firm’s competitive abilities and adoption of strategic planning 157
Table 4. 11 Awareness of TOWS matrix as a strategic
planning tool 158
Table 4. 12 Application of TOWS matrix in manufacturing organizations 159
Table 4. 13 Extent firms apply TOWS matrix model 160
Table 4. 14 Length of time firms have applied TOWS matrix model 161
Table 4. 15 Extent Organizational change culture relates to Awareness of TOWS matrix model 162
Table 4. 16 Extent to which resistance to change in organisations relates to degree of application of TOWS Matrix model 163
Table 4.16A Computation
of Correlation Coefficient derived from tables 4.9 and 4.11 164
Table 4.17 Extent Management Development is required in
Strategic planning 167
Table 4.18 Extent firms’ Managerial abilities relate to degree of application of TOWS matrix model. 168
Table 4.19 Extent Management Expertise in terms of core skills, competences, and capabilities is required for successful strategy formulation using TOWS matrix model 169
Table
4.20 Computation of Expected Frequencies derived
from tables 4.2.17 and 4.2.18 171
Table
4.21 Computation of Pearson Chi-Square from Table
4.17 and 4.18 172
Table 4.22 Improvement in identified performance measures in the past five years (2004-2009) of application of TOWS matrix model. 174
Table 4.23 Extent competitive capabilities of firms’ products have improved in relation to others in the best of class in the past five years (2004-2009) of Application of TOWS matrix model. 175
Table: 4.23A Computation of Correlation Coefficient
derived from Tables 4.13 and 4.23 177
Table 4.24 Extent firms consider accurate assessment of environmental elements crucial in strategic planning 179
Table 4.25 Extent
Comprehensiveness
of firms’ Environmental scanning elements relates to the reliability of strategies formulated with TOWS matrix model. 180
Table
4.26 Computation of Expected Frequencies derived
from tables 4.2.8 and 4.2.24 183
Table
4.27 Computation of Pearson Chi-Square from Table
4.8 and 4.24 184
Table
4.28 Use of Strategic Alliance
in Nigeria
Manufacturing Firms 186
Table 4.29 Low Adoption of Strategic Alliance relates to the extent of Change Resistance in manufacturing firms. 187
Table 4.29A Computation of Correlation Coefficient derived
from Tables 4.9A and 4.26 188
Table 4.30 Existence of Inherent Problems/Challenges in the application of TOWS matrix model 191
Table 4.31 Challenges to successful application of TOWS matrix model in manufacturing firms 192
Table 4.32 Capacity to overcoming problems/challenges associated with the application of TOWS matrix model in manufacturing firms. 194
Table
4.33 Benefits of applying TOWS matrix
in manufacturing firms 195
Table
4.34 Prospects of Applying TOWS
matrix in manufacturing firm 197
List of Figures
Figure: 2.1 Nimmanphatcharin Internal Environment Model 40
Figure: 2.2 The Competitive Environment Model 43
Figure: 2.3 Strategic Planning Model 60
Figure: 2.4 Mitzbergs Core Design School Model 61
Figure: 2.5 Steiners Planning Model 63
Figure: 2.6 Wheelen and Hunger Model 65
Figure: 2.7 SWOT Analysis Model 71
Figure: 2.8 Critical Success Factors Model 75
Figure: 2.9 Boston Consulting Group (BCG) Matrix Model 77
Figure: 2.10 Internal Factor Evaluation (IFE) Matrix Model 81
Figure: 2.11 External Factor Evaluation (EFE) Matrix Model 84
Figure: 2.12 Internal –External
Factor Evaluation (IE) Matrix Model 86
Figure: 2.13 Strategic Positions
and Action Evaluation Matrix (SPACE) Model 88
Figure: 2.14 Quantitative Strategic Planning (QSPM) Matrix Model 90
Figure: 2.15 Grand Strategy (GS) Matrix Model 94
Figure: 2.16 TOWS Matrix Model 101
Figure: 2.17 TOWS Analysis of Daimler-Benz Manufacturing Company 104
Figure: 5.2.1 WEBBED TOWS Matrix
Model (Developed in this Study) 217
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
A major aim of
enterprises is to build a market position strong enough and an organization
capable enough in producing successful performance despite foreseeable events,
potent competition, internal and external organizational problems
(Nimmanphatcharin, 2003:13). Global competition requires that managers think of
ways to change their organizations continuously to gain competitive advantage.
The complexity of today’s operative
environment necessitate adoption of a best practice strategic planning model in
meeting contemporary challenges faced by organizations in terms of domestic
and cross border product competitiveness
(Faulkner and Bowman,2007:45).
Eze (2001:35)
posits that both organizations and their managers are subject to changes which
render once-effective approaches to competition ineffective. Ezigbo (2007:79) states that managers
introduce changes to solve organizational problems like low productivity,
laissez-faire attitude, conflicts, and competitive pressures.
The turbulence
encountered by manufacturing organizations in Europe, America and the Far East
in the late 1980’s coupled with competition introduced by globalization and
free market economy forced firms to review the quality of their strategic
formulations by putting in place a strategic planning framework known as the
TOWS matrix that identifies threats and opportunities in the external
environment and objectively seek to match them with identified internal organizations
weaknesses and strengths in a logical manner in order to remain competitive
(Eaton,1999:83).
Itami (2007:29)
posits that the proactiveness necessary to place Nigeria’s manufacturing firms in
the league of best practice firms for strategic leadership in their spheres of
economic endeavour is lacking admist stiff competition and a diversity of
industry and environmental challenges.
Strategy
involves the critical decisions a firm makes about how to match its resources
and strengths with its environment to create an advantage over its competitors.
The decisions to pursue a strategy type be it, Business level (competitive)
strategy, Corporate or Functional level strategy are viewed as measures that
can fastrack or impede the adoption, adaptability and sustainability of strategic planning frameworks in
organizations. The decisions are also rooted on certain organization culture
which affects the resistance or acceptability of change. Furthermore,
organisational ideology and strategic planning orientation be it Ansoff’s
strategic planning model, Mintzberg’s design school model, Steiner’s company-wide
planning, or Wheelen and Hunger’s strategic management model also determine the
strategy a firm will pursue, as large scale
preponderance of conservatism and resistance to change exist in firms.
Strategic
Planning, being a management function relies on the competence of
management-level employees for effective implementation. Arising from this, it
is viewed that management’s human
resource capacity in terms of core skills determines the extent to which it
would pursue and implement strategic models
be it of synoptic, adaptive or synthesis (synoptic- adaptive) origin.
The integration
of management’s strategic intent in strategy development to drive organisations
visions and missions are also seen as key to the sustainable application of
TOWS matrix strategic planning model in meeting desired performance. Hoffer and
Schendel (1978:25) posit that an effective planning model must explicitly
include the visions and missions of the firm, an establishment of firm’s
objectives, and an assessment of the current strategy based on a comprehensive
scanning of environmental analysis elements. Studies by Wihioka (2006:89),
shows that firms in Nigeria
apply Strategic Planning processes with low degree of formality and
comprehensiveness, and doubts the reliability of formulated strategies to
assure firms of desirable performance.
A variety of
strategic planning frameworks based on synoptic, adaptive and synthesis
(synoptic-adaptive) ideologies have been developed, showing the relationship of
critical internal and external environment variables; including- The SWOT
Analysis model, Critical Success Factors (CSF’s) models, and Strategic Factor
Evaluation Matrix (SFEM) models-
Internal Factor Evaluation (IFE) matrix model, External Factor Evaluation (EFE)
matrix model, Internal-External (IE) matrix model, Strategic Positioning and
Action Evaluation (SPACE) matrix model, Quantitative Strategic Planning (QSPM)
matrix model, Grand Strategy (GS) matrix model, and matrix models – Boston
Consulting Group (BCG) matrix model, and General Electric Business Screen
Matrix.
These models
aside from showing the relationship of critical internal and external
environment variables are fraught with certain inherent structural and
operational limitations that inhibit their individual and collective
capabilities to providing feasible alternative strategies for firm’s
competitive advantage, as do the TOWS matrix model (Weihrich and Koontz
2005:15; Hirsch, 2006: 327; Davis, 2007: 32). The limitations
