STRATEGIC PERFORMANCE MANAGEMENT A TOOL FOR PUBLIC SECTOR TRANSFORMATION A STUDY OF SELECTED FIRMS IN NIGERIA

ABSTRACT

The objective of this research work is to examine Strategic Performance Management as a tool for public sector transformation with reference to Federal Inland Revenue Service, National Agency for Food and Drug Administration and Control and the Nigerian Communication Commission. Data for the research were collected through primary and secondary sourëes. The collected data were analyzed in tables and simple percentages, while the hypothesis were tested using the Chi-square statistical technique. The findings of the study show that: (i) Strategic Performance Management have resulted in increase in tax revenue generated by FIRS and improved regulation by NAFDAC and NCC. (ii) Strategic Performance Management is relevant in transforming public sector organization into efficient institutions. (iii) There is a relationship

between Strategic Performance Management and Operational efficiency. (iv)The various key performance indicators used to measure performance in public sector are effective in motivating mployees towards achieving pre-determined objectives. Based on the above findings, the study concludes that the public sector can be ran efficiently as in the private sector if performance anagement processes are put in place. Drawing from the conclusion, it is therefore ecommended that efforts should be made to identify simple, meaningful metrics that are driven from the top-down and are relevant to specific stakeholders as they are critical to performance Lmeasurement, success and public sector efficiency. It is also recommended that corporate [nission statement should be motivating for members of the organization and of the society and [hey should feel it worthwhile working for such an organization or being its customers.

TABLE OF CONTENTS

Certification –  –           –           –           –           –           –           –           —          –           ii

Approval –       –          –          –           –           –           –           –           iii        

Dedication      –           –          –          –          –          –          –          –           –           iv

Acknowledgments –    –  –          –          –           –           –           –           v

Abstract          –           –          –          –          –          –          –          –           –           vi

Table of contents             –          –          –          –           –           –           vii

CHAPTER ONE: INTRODUCTION

1.1       Background of the Study –          –           –           –           –           1

1.2       Statement of the Problem                –           –           –           –           2

1.3       Objectives of the Study          –           –          –          –          –           –           3

1.4       Research Questions     –              –          –           –           –           3

1.5       Statement of Hypothesis          –          –          –           –           4

1.6       Significance of the Study          –           –           –           –           5

1.7       Scope of Study           –          –          –          –           –           –           –           5

1.8       Limitations of Study   –           –           –           –           –           6

1.9       Definition of Terms    –           –          –          –          –           –           –           6

References      –          –          –          –          –          –           –           –           7

CHAPTER TWO: REVIEW OF RELATED LITERA

2.1       Introduction    –           –          –          –          –          –           –           –           8

2.2       Conceptual Framework           –           –          –          –           –           –           9

.2.1      Strategic Decision Making      –   –          –           –           –           11

2.2.2    Issues in Strategic Decision Making   –             –           –           13

2.2.3    Schools of Thought on Strategy Formation    –           –           15

2.2.4    The Concept of Strategic Management Process        –           19

2.2.5    Elements in Strategic Management Process    –           –           21

2.2.6    Models of Strategic Management Process –         23

2.2.7    Strategic Intent          –          –           –           –           –           24

2.2.8    Concept of Stretch, Leverage and Fit         –           –           25       

2.2.9    The Nature of Vision  –       –           –           –           –           26

2.2.10 Defining Vision              –           –           –           –           26

2.2.11 Vision –          –           –          –           –           –          –          27

2.2.12 The Benefit of Having a Vision     –          –          –           28

2.2.13 The Process of Envisioning     –         –           –           –          28

2.2.14 Defining Mission –       –        –          –           –          –           30

2.3 Theoretical Framework –   – –          –          –          –          –           36

2.3.1 FIRS-A Typical Public Sèètor Institution                  –           36

2.3.2 Historical Development of FIRS –          –           –           38

2.3.3 National Agency for Food, Drugs Administration and Control (NAFDAC)-  44

2.3.4 The Nigerian Communications Commission (NCC) –               –           –           49

2.3.5 Transformation: Private Lessons for the Public Sector –           –           52

2.3.6 Impediments to Successful Public Sector Governance               53

2.3.7 Measures for Effective Public-Sector Governance and Transformation –         54

2.3.8 Transform the Governance Board in Composition and Approach –      –           54

2.4 Empirical Review –           –   –           –           –           –          57

2.4.1 Defining Business        –          –          –           –          –           57

2.4.2 Dimension of Business Definition             –           –           58

2.4.3 Levels at which Business could be Defined        –           –           59

2.4.4 The Product/Service Concept          –          –           –          60

2.4.5 Business Model – –           –          –           –           –           61

2.4.6 Goals and Objectives            –          –          –          –          63

2.4.7 Roles and Objectives     –    –           –          –           –           63

2.4.8 Characteristics of Objectives     –          –          –           –          64

2.4.9 Issue in Objectives-Setting      –          –           –          –           66

2.4.10 What Objectives are Set?        –          –          –          –           69

2.4.11 How are Objectives Formulated           –          –          –           72

2.4.12 Balanced Scorecard Approach to Objectives Setting  –              74

2.4.l3 Critical Success Factors (CSFs)              –           –           76

2.4.l4 Performance Indicators (KPIs) –         –          –          –           78

2.4.l5 Benefit of KIPIs        –           –          –           –           –           80

2.5 Summary of Reviewed Literature    –           –           –            81

References                –          –           –          –          –            83

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction –       –           –           –           –           –           –           86

3.1 Research Design –          –           –          –           –           –           86

3,2 Sources of Data –            –           –           –           –           –           87

3.3 Population of the Study    –         –           –           –           –           87

3.4 Sample Size Determination   –          –           –           –           –           88

3.5 Questionnaire Design and Administration         –           –           89

3.6 Method of Data Analysis –      –           –           –           –           89

3.7 Statistical Procedure         –    –           –           –           –           90

References –    –           –          –          –          –          –           –           –           92

CHAPTER FOUR: DATA PRESENTATION

4.1  Introduction –       –       –           –           –           –           –           93

4.2 Presentation and Analysis of Data –         –           –           –           93

4.3 Test of Hypothesis            –           –          –          –           –           102

4.3.1 Test of Hypothesis One              –          –           –           –           103

4.3.2 Test of Hypothesis Two                    –           –           –           104

4.3.3 Test of Hypothesis Three       –          –           –           –           105

4.3.4 Test of Hypothesis Four             –           –           –           –           105

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings          –           –          –           –           –           107

5.2 Conclusion                 –          –           –           –           –           108

5.3 Recommendations           –           –           –           –           –           –           109

5.4 Areas for Further Study           –           –           –           –           110

            Bibliography   –           –           –          –           –           –           111

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

There is increasing demand on government and its agencies to imbibe governance and  leadership principles that will enable it function and deliver services more efficiently. This is a global phenomenon. Although the advanced economies are progressively pursuing programmes and implementing transformational strategies aimed at making their institutions more responsive and function at optimal level of efficiency, the developing economies are still at the lows of such efforts. According to McPherson and Ebrig (2005). “Every successful corporate transformation is built upon a solid foundation of effective governance. The private sector has spent years working to develop better models for governing corporate investments and other critical decisions, as well as for monitoring the results of those decisions”. They noted that companies that have gotten governance right have an edge over competitors in reaching and sustaining high performance.

McNamara (1997 – 2008) posits that the private sector efficiency was achieved on the strength of the implementation of strategic performance management systems. He defined strategic performance management as “the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals.” This system, he contends is largely lacking in the pubic sector.

Following that strong lead from the private sector, government agencies are also seeking to create more effective governance models that can increase their chances for successful transformational efforts in strategy, sourcing, information technology, workforce performance, finance and many other areas. McPherson and Ehrig notes that such governance model cannot simply be lifted from the corporate arena and applied to the public sector without modification “Unique cultural and structural charactenstics of government organizations must be accounted for if governance models are to be successfully applied”

The Federal Inland Revenue Service (FiRS), National Agency for Food, Drugs Administration and Control (NAFDAC), and the Nigerian Communication Commission (NCC) are three institutions that successfully implemented transformational programme with very visible result in terms of operational efficiency The organizations have fully adopted the private sector operational model with highly improved service offerings This research work will therefore focus on the transformation strategy and current operational module to provide a guide for its replication in other government institutions

1.2 STATEMENT OF THE PROBLEM

Private sector operational efficiency is a gulf away from the gross inefficiency of the public sector institutions and agencies. Service delivery in the public sector is at sub- optimal levels. And the reason is that governance culture in those agencies does not emphasize efficiency in its processes and procedures as, could be achi&ved through the implementation of strategic performance management. Their major challenge is lack of ability to implement clear performance measurements that makes it possible to execute ‘corporate strategy successfully. Problems often associated with strategic inefficiency in the public sector organizations includes: