EXECUTIVE COMPENSATION PACKAGES AND ITS EFFECT ON AUTHORITARIAN MANAGEMENT STYLE

ABSTRACT

The study examines executive compensation packages and authoritarian management style of fast consuming goods companies. Precisely, the study focused on Cadbury, Nestle and Dangote Nigeria Plc. The study employed descriptive survey method. The population of the study comprises of all management staff of Cadbury, Nestle and Dangote Nigeria Plc. The study adopted simple random sampling technique to select the sample for the study. Data for the study were collected through the use of structured questionnaire.  The data collected were analyzed through the use of descriptive statistics of mean and standard deviation while the hypothesis was tested using regression techniques. All analysis was carried with the aid of SPSS.

The result from the analysis reveals that executive compensation packages such as long term incentive and retirement plan has positive and significant effects on authoritarian management style of fast consuming goods companies. It was also found out that annual incentives, bonuses and supplemental retirement plan has negative and significant effects on authoritarian management style of management staff of fast consuming goods companies. It was recommended that Fast consuming goods companies should encourages long term incentives plan and retirement plan for their management staff as it increases authoritarian management style for the management staff.

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND TO THE STUDY

The method adopted by organizational managers in directing, guiding and controlling the employees in their service determine the pace of progress in such organization (Clark, 2010). That is if the business managers control, direct or guide the staff under them properly by adopting appropriate leadership style, employees will show greater commitment to their duty. However in some organizations, managers are no longer effective and committed to their duties. Employees on their part become nonchalant about their work duties which invariably have negative impact on performance of the organization. According to Adamaechi & Romaine (2012) management is very essential in any kind of group or organisation and it can mean the difference between success or failure of any group or joint activity. Hence for enterprise to achieve its goals the management position of such enterprise must be occupied by competent leaders.

An effective management style must involve influencing others towards organisational performance and achievement of goals. According to Igbo (2012) management style should influence group activity towards achievement. It is the behaviour of an individual when he is directing and guiding the activities of the group towards a common goal. His success or failure in attaining the goals of the organization depends largely on his ability to effectively organise and manipulate the human and material resources available to him.

Scholl (2010) refers to management style as the pattern of behaviour use by a business manager in attempting to influence group members and make decision regarding the mission strategy and operation of group activities. Clark (2010) perceived management style as the manner and approach of providing direction, implementing plans and motivating people. It is important that business managers should adopt an effective management style that will lead to maximum organizational productivity. Ram (2011), Mgbodile (2014), Melling and Little (2014) described autocratic, democratic and laissez-faire management styles extensively. According to them an autocratic leader is a leader who is high-handed in his administration. He is a centre of all the activities that go on in the establishment where he is a manager. A prime determinant of action, all authority emanates from him and ends with him (Ram, 2011). He monopolizes the decision-making process and takes decisions all alone. He believes his ideas and thoughts to be superior to those of his subordinates and considers involving them in decision-making as a waste of time.

He uses threats and intimidation as a means of ensuring absolute obedience and dependence on him. He does not take opposition kindly as he tends to regard those with opposing views as enemies of his administration. He clamps down on opposition with some ruthlessness and strives for conformity of all to his directives. Workers under an autocratic manager may be seen as working under pressure and fear most of the time and often show dissatisfaction to this style of management by various means such as indulging in eye service, lateness to work, reduction of work output, sabotaging the work, seeking transfer or voluntarily resigning from the establishment (Clark, 2010). The autocratic manager finds it difficult to get genuine love, support and cooperation from subordinates who regard his administration as a “one man show’ According to Yalokwu (2010), Canadian Association of Student Activity Advisers (2004) and Umeakuka (2015) an autocratic manager has little or no trust and faith in his or her subordinates; takes decision alone; gives order and command without considering the subordinates; determines group policy; gives step by step directions and dictates task; believes he is always right and entertains no question from subordinates.