Project Materials

CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Organizational success is a measure by how well a company meets the individual objectives of its business plan. It lies in understanding how each element can support or restrain the other, on how to balance the dynamics between the element to determine the most constructive solutions in any situation.

To be successful, an organization must have a statement, a philosophy, and a series of programs and goals that focuses on the skills and talents of its employees. All of this must be managed with care and guidance so that the organization’s mission is successfully accomplished.

One way an organization can achieve organizational success is through employee empowerment. Hage and Lorensen (2005) label empowerment as an “enabling process or objects occurs from a point of allocation of possessions and prospects which boost decision making to accomplish change”.

Asgarsani, Duostdar and Rostumi (2013) noted that the concept of employee empowerment pre-dates the industrial revolution an era characterized by employees or craftsmen producing goods that are entirely under the control of management.

Since the early 1920s, Taylor’s opinion of breaking tasks into smaller units to be undertaken by employee, deciding how best to accomplish the task resulted in high productivity in an organization.

Prior to Taylor’s “intervention”, the dominant organizational practices were downsizing, externalizations of jobs, flattering of organizational levels – all of which resulted to declining work force loyalty, commitment, satisfaction and over all organizational performance.

These trends in employee  organization’s relationship necessitated a closer look at the human resource architecture, leading to a consensus among scholars and practitioners that the growth and development as well as the competitive structure of an organization depends largely on human resource empowerment.

The decision making component of the proxy variables is that which provides the employee the ability to participate in the day-to-day running of the organization. According to Yong and Choi (2009), Peter et al (2002) points out that decision making overlaps autonomy as critical to analysis of decision making is an analysis of team performance through which autonomous decision making are central to team performance.

According to Kariuku (2014) firms are organized around teams, highly formalized but decision making were at the top in organizations. Empowerment is let go off right to take certain decisions, on the other hand some managers may perhaps feel vulnerable by a loss of authority or a lesser capacity to control (McCrimmon 2010).

A range of factors contribute to efficient empowerment. The business culture for instance has to shore up the procedure of empowerment; it will not work when a manager feel vulnerable.

To empower means to give power to. Power, however, has several meanings. In a legal sense, power means authority, so that empowerment can mean authorization (Kenneth W. Thomas 1990). However, power also means energy.

Thus, to empower also means to energize. This latter meaning best captures the present motivational usage of the term. The word empowerment refers to the motivational content of this new paradigm of management.

As leadership expert Daniel Goleman points out “the Employee is a basic molecule of distributed leadership and basic unit in which you can change norms throughout the organization.”

In the past, the organizational researchers has focused their work on empowering management practice, including delegation of decision making from higher organizational levels to lower levels and increasing access to information and resources for individuals at lower levels (Blau and Alba 1986).

Empowering employee to take critical decision on matters of interest have the tendency to enhance performance of an organization. According to Zeitharnl, Bitner and Grembler (2009),

it is a company responsibility to give employees the tool needed to make decisions using their common sense to enable them solves problems of every day task without involving their managers. Through this, employee empowerment is important to the organizational change process as it fulfills the individual’s need for a sense of control.

Rappaport and Seidman (2003) suggested that empowerment is more than a mere process solution and prevention. This form of a “duty structure” in which powers are concentrated at the top of the pyramid and flows to lower levels provides no opportunity for optimal use of intellectual resources and creativity of employees.

As a consequence, there is little or no self-determination, lack of mastery of work schedules, meaningless work and dishonesty by the employee to work towards the attainment of organization’s goals and objectives to result to organization’s performance.

It is based on this premise that the study seek to identify the problem that delineate organizations activity to empower employees. The study is determined to examine relationship between employee empowerment and organizational success in the oil and gas sector in Port Harcourt.

1.2 Statement of the Problems

In view of the fierce competition and the increasing demand from customers, it has become necessary to search for factors that contribute to the success of multinational firms to maintain their survival and sustain their competitiveness. This is due to the important role of this sector in the Nigerian economy.

Additionally, through reviewing the previous literature, it seems that there is a lack of studies that measured the role of employees’ empowerment in achieving organizational success. However, Emerson, (2012) have discovered that many managers don’t really recognize the significance of employee empowerment and its effect on the organizational success.

Managers that are recognize with their capacity to resolve problems and take decisions may perhaps be unable to find a most important basis of their identity and work satisfaction that if they over empower workforce. Cultures that shore up empowerment support mangers to be catalysts, facilitators, coaches‟ enablers and developers of others rather than simply decision making powers.

The problems that led to this study are lack of job autonomy as employees are not allowed to work independently, lack of employee training and development and inadequate/poor compensation management strategies adopted by the management of multinational firms in Port Harcourt.

There are many reasons for choosing this industry in particular. First, the oil and gas sector is one of the most prominent sectors in Nigeria making it highly competitive. It is also facing a rapidly changing environment (Achi & Ayache, 2001).

These facts render this industry as an abundant ground for researchers to be studied. Moreover, the oil and gas sector in Port Harcourt aim to retain the employees and ensure their commitment to the organization due to the high costs of turnover, recruiting, and training new employees.

1.3 Objectives of the Study

The main objective of the study is to examine relationship between employee empowerment and organizational success in the oil and gas sector in Port Harcourt. The specific objectives are as follow:

1.       To examine the extent to which job autonomy associate with organizational success.

2.       To examine the extent to which training is related with organizational success

3.       To examine the extent to which compensation leads to organizational success.

1.4 Research Questions

1.       To what extent does job autonomy associate with organizational success?

2.       To what extent does tanning is related with organizational success?

3.       Does employee compensation lead to organizational success?

1.5 Research Hypotheses

The following research hypotheses were formulated to guide the study;

HO1: There is no significant relationship between job autonomy and organizational success.

HO2: There is no significant relationship between tanning and organizational success.

HO3: There is no significant relationship between employee compensation and organizational success.

1.6 Significance of the Study

This study evaluates the impact of Employee empowerment on Organisational success and determines to what extent it is successful in both local and foreign organizations.

Presently, many multinational firms are attracted towards the, Nigeria market. It will be useful for Nigerian working environment for those multinational firms too.

This paper tries to make the Employee leaders and top management realize the importance of Employee empowerment as a means enhancing organizational. It is hoped that business corporate companies at the corporate level will take advantage of this research and will apply this approach for Employees.

This study suggests that organizations following the Employee empowerment approach can gain advantages. Employee empowerment can enhance both quantity and quality of Employees work. The study will be useful for Employee leaders and Employee members in building of the empowered Employees.

The study will provide guidelines for project/Employee leaders in the development of Employees work. Findings of this research will provide empirical data for Employee leaders, top management, and Employee members to help them create an empowered environment for better Organisational success.

Creativity and innovation will be promoted in Employee-based environment because of cross fertilization of ideas. The empowerment concept will help allay concerns about employee freedom and will help to motivate the employees.

1.7 Scope and Delimitation of the Study

The content scope of the study is limited to the following heading:

Content Scope: The content scope of this study involves employee’s empowerment and organizational success. Basically this forms of two vulnerable namely employee empowerment and organizational success.

The independence variable is employee’s empowerment measured by its dimension job autonomy, compensation, training, while the dependent variable is organizational success measured by effectiveness, profitability and innovativeness.

Geographical Scope: This study is delimited to selected multi-national firms; Total E&P and Agip Oil Company Limited.

Uses of Analysis: Is the type of multi-national firms which are the individuals. The scope of this study is carried out to ascertain between employees empowerment and organizational success.

The study was limited by the following:

The level of frankness in response to questions by the respondents is quite doubtful.

Finance: Accessing fund for the research work was difficult and this limited the quality of research activity.

Time: The time allocated to the research work was not sufficient to give room for further intensive work on the field of study.

Organization Policy: Policies of the organization limited the level of information received. The personnel of the firms were not willing to give information, stating that it was against the organization’s policy.

1.8 Definition of Terms

Employee empowerment: It is giving employees a certain degree of autonomy and responsibility for decision making regarding their specific organizational tasks.

Organizational Success: Organizational success is a measure by how well a company meets the individual objectives of its business plan.

Profitability: Profitability is the state of yielding financial profit or gain. It is often measured by price to earnings ratio.

Job Autonomy: Job autonomy is considered as a core characteristic of work and has been widely studied by a number of scholars

Training: Training is considered one of the major areas of the Human Resource Management that leads to effective usage of the human resources.

Compensation: Compensation is the systematic approach of offering monetary value for individuals in exchange for work they had performed.

Profitability: It is the state of yielding financial profit or gain. It is often measured by price to earnings ratio.

Innovativeness: Innovation is more than coming up with good ideas, it also includes making these ideas work technically and commercially.

EMPLOYEE EMPOWERMENT AND ORGANIZATIONAL SUCCESS (A SURVEY OF MULTI-NATIONAL FIRMS IN PORT HARCOURT)