IMPACT OF INTERNAL CONTROL MECHANISM FOR SUCCESSFUL OPERATION IN AN ORGANIZATION
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IMPACT OF INTERNAL CONTROL MECHANISM FOR SUCCESSFUL OPERATION IN AN ORGANIZATION
Chapter One: Introduction 1.1 Background of the Study
In this chapter, the researcher seeks to investigate and perform research on the impact of internal control mechanisms on successful operation in an organisation, specifically the First Bank of Nigeria, Kaduna South Branch.
Weber (2010) defines impact as “a powerful effort that management has in order to perform their function effectively and achieve their goals or objectives.”
Benarivo De Guisppee (Augustan Gill, 1943) defined internal control as a plan of organisation that includes all of the coordinated methods and measures used within a business to protect its environment, ensure its effectiveness and efficiency, and encourage adherence to prescribed managerial policies.
According to Louis Fisher (2004), operation is an organised activity in an organisation in which numerous people do distinct tasks in order to achieve organisational goals.
Some of the fascinating aspects of the topic are as follows:
Fraud and Error Prevention: According to Adebayo Adedeji (1979), management is responsible for the prevention of fraud and errors in the organisation, which is normally accomplished by implementing and maintaining effective internal control systems.
Discover A Good Internal Control System: According to Rober H. Haverman (2004), a good internal control system should have a proper coordination and communication network to ensure that management decisions and policies are successfully conveyed throughout the organisation and the results are reported back efficiently.
1.2 Statement of the Problem
The most serious issue impeding the proper running of the public and private sectors at all levels has been fraud, mistakes, defalcations, mismanagement, and abuse of office.
Applicants are bitterly claiming that First Bank of Nigeria’s Kaduna South branch does not enable employees to embark on training and development after working for the bank for a set period of time.
Another major issue confronting the organisation in terms of recruitment, selection, training, and development of applications or candidates during and after an interview is the pressure exerted by the top official to select their candidate from among the applicants regardless of their performance.
There is no fair play for promotion and training within the organisation.
The working conditions are inadequate, as are the motivational and grievance settlement methods.
Over the years, various management has attempted to implement a corrective action. Despite these efforts, a long-term solution remains elusive. At times, one wonders if the numerous internal control measures implemented in public and private organisations work, and if so
to what extent can one conveniently attest to the fact that internal controls and measures have contributed to the resolution of the organization’s inherent problems.
The study looks into the internal control process of First Bank of Nigeria Plc. To determine how well the controls implemented were able to achieve the intended purpose.
It is worth noting that the most important aspect of implementing internal control mechanisms in an organisation is that the system be subjected to a continual review and appraisal process if it is to work properly and achieve the objective for which it was implemented.
1.3 GOALS OF THE STUDY
The purpose of this research is to evaluate the efficiency of internal control mechanisms on worker performance in an organisation, specifically First Bank Kaduna South Branch.
The research is an endeavour to identify the prospects and issues of internal control mechanisms on the performance of workers in an organisation, namely First Bank of Nigeria, Kaduna South Branch, are as follows:
To investigate the impact of internal control mechanisms at First Bank of Nigeria Plc.
To identify the issues that internal control mechanisms confront when implementing on the performance of personnel at First Bank of Nigeria Plc.
To examine the difficulties and prospects of internal control mechanisms on worker performance at First Bank of Nigeria Plc.
1.4 RESEARCH QUESTIONS
What is the impact of First Bank of Nigeria Plc’s internal control mechanisms?
What are the challenges that the Internal Control Mechanism faces when implementing personnel performance?
What are the difficulties and prospects for First Bank of Nigeria Plc’s internal control mechanism on worker performance?
1.5 Significance of the Study
This initiative is extremely relevant and vital to the following groups of people:
Society and Public: This initiative will assist shareholders, customers, and the general public since it will explain what internal control is and why it is important in the private sector, particularly at First Bank of Nigeria Plc.
Tax Authority: They will be interested in learning how management conducts the company, particularly whether it loses or makes money.
Academic Community: The researcher will contribute to immediately available knowledge in the academic realm about internal control mechanisms. Students, professors, and other scholars will find it quite valuable and will refer to it.
Management: The study will also make ideas and recommendations on how to improve the performance of the internal control mechanism. Although it is simply a research, it has the potential to help some banking organisations solve comparable difficulties.
To the Researcher: This is part of the organised work for obtaining an HND in Human Resources Management.
1.6 SCOPE OF THE STUDY
This study is meant to address internal control mechanisms in the Nigerian banking industry, with a focus on reference studies. The First Bank of Nigeria Plc operates several branches throughout the country, with its headquarters in Lagos. This study will be limited to the Kaduna branch.
The First Bank Plc has numerous branches in Kaduna and other significant towns in the state, including Zaria, Zonkwa, and Kafanchan. The study will focus on the branch along Kakuri Kaduna South for six years, from 2006 to 2012.
1.7 Limitations of the Study
The typical unwillingness of banks, as demonstrated by First Bank Plc, to disclose information about their operations for external study has hampered this research. If all of the necessary material had been made available, the research analysis may have been more in-depth.
Furthermore, the researcher was concerned at times since there was so much information on the subject.
Finally, and clearly, the cost of performing research is substantial, posing a significant limitation to the task.
1.8 Historical Background of the Case Study
For almost a century, First Bank of Nigeria Plc has stood out as a premier banking institution and a significant contribution to Nigeria’s economic success and development.
Sir Alfred Jones, a shipping magnate from Liverpool, created First Bank in 1894. The bank began operations in the office of Elder Dempster and Company in Lagos.
It was formed as a limited liability company in London on March 31, 1894, with its headquarters in Liverpool, and began operations under the corporate name Bank of British West Africa (BBWA) with a paid-up capital of 12,000 pounds sterling.
It began operations by acquiring its predecessor, the African Banking Corporation, which had been created earlier in 1892. This marked the beginning of the bank’s rise to prominence in the West African banking industry.
During its early years of operation, the bank had tremendous growth and collaborated closely with the colonial administration to execute standard central bank functions such as issuing specifications in the West African subregion.
To justify its West African coverage, a branch was created in Accra, Gold Coast (now Ghana), in 1896, and another in Freetown, Sierra Leone, in 1898, promoting the bank’s worldwide operations. In 1900, the Bank of Nigeria opened its second branch in old Calabar, and two years later, its services were expanded throughout Northern Nigeria.
The bank maintains the banking industry by operating a network of 411 branches (as of May 2012) across the federation. The bank also maintains a branch in London and has expanded into a variety of financial activities and services, including commercial, merchant, and international banking.
The bank has maintained its position as the market leader in financing long-term economic development projects. The foundation of this was in 1947, when a long-term loan was provided to the colonial administration.
To demonstrate its dedication to its customers and the development of the Nigerian economy, the bank has since expanded its loan and credit facilities to include all sectors of the economy.
When the bank was opened in 1894, it had six employees: three Europeans and three Africans. Today, the bank is fully Nigerianized, reflecting the goals and desires of the Nigerian people and government, as well as the bank’s willingness to help the country’s economy.
To prepare itself for opportunities in a changing market environment, the bank completed multiple reorganisation operations. In 1957, the Bank of British West Africa was renamed Bank of West Africa, and in 1966, Standard Bank of British West Africa Limited was established.
The bank was then formed locally in 1969 as the Standard Bank of Nigeria Limited in accordance with the 1968 Companies Decree. Following that, active participation by Nigerians in bank management became corporate policy.
The bank was launched on the Nigerian Stock Exchange (NSE) in March 1971 and has received the NES President’s Merit Award eight times for the best financial report.
The bank’s name also changed in 1979 and 1991 to First Bank of Nigeria Limited and First Bank of Nigeria Plc, respectively. In 1985, the bank implemented a decentralised structure that included five regional administrations.
This was fine-tuned in 1992 to increase the bank’s operational efficiency. In 1996, it created the FBN Century II Project to align its operations with market trends.
In preparation for the intense competition caused by the government’s plan to liberalise the country’s financial sector. In addition, the bank is working with other banks to promote a smartcard project that aims to eliminate the risk associated with carrying large amounts of cash for transactional purposes. The bank’s brand is First Bank Value Card.
The bank’s share capital increased from N107.599 million in 1993 to N530.309 million by March 1999, representing amazing growth throughout the years. As of March 1999, the group’s overall asset base was N139.785 billion, with a deposit base of N89.868 billion.
As another example of First Bank’s unrivalled profitability and leadership in the Nigerian financial market. The bank reported a profit after tax of N12.4 billion for the fiscal year ending March 31, 2008.
The bank’s offer to sell over 2 billion shares in 2009 was fully subscribed, and the 2.5 billion in 2010 was oversubscribed by 18.79%, demonstrating the public’s confidence in First Bank.
The bank has approximately 300,000 individual and institutional shareholders from all throughout the country. Its leadership position in the private sector stems from its consistent track record as a successful financial institution.
1.9 Definition of Terms
For the sake of clarity, some technical words used in the project’s text have been defined.
Human Resources: The administration and policymakers of a company or organisation.
Impact is a powerful effort made by management to perform their functions effectively and efficiently in order to attain their aims and objectives.
Control is an organisational strategy that outlines all of the procedures and tactics used to protect the environment, ensure effectiveness, and encourage adherence to established managerial principles.
Operation: An organised activity in an organisation in which multiple people undertake diverse tasks in order to achieve organisational goals.
Internal: An action implemented within the organisation by management in order to achieve their objectives.
Objective: Specific goals should be measurable in terms of growth, quality, and timeliness.
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