FACTORS AFFECTING EFFECTIVE RECORDS KEEPING IN BUSINESS ORGANIZATIONS
CHAPTER TWO
LITERATURE REVIEW
2.1.0 Conceptual Framework
2.1.1Definition and nature of Business organization
A business organization is an entity aimed at carrying on commercial enterprise by providing goods or services, to meet needs of the customers. The different forms of business organizations are Sole Proprietorship, General Partnership, Limited Partnership, Corporation, "S" Corporation, and Limited Liability Company. It includes all types of Organization irrespective of their legal form (such as family Organization, sole proprietorships or cooperatives) or whether they are formal or informal Organization to ensure inclusiveness (Hill .T, 1987). The business definition has no precise answer, it depends on who provides the definition (Steinhoff & Burges, 1995), varies between countries (Barrow, 1992), industries (Wabwire, 1996) and Scholars (Kashyap, 1988). It is usually basing on: number of employees, sales turnover and capital outlay, amount of capital and colored social aspects and mostly traditional Organization (Brel, 1997).
Wabwire (1996) defines SBEs as: generally managed, operated and owned by one or two people, funds from self and/or close friends or with skill acquired both informally or with residence, joint usage of same location especially where there is similarity of the output limited geographical spread, informal nature of business and complete absence of record accounting.
Fields (1990) asserts that non wage employment is the norm in the form of self- employment, family labour and apprenticeships account for more than 80 percent while the wage employment accounts for 10 percent with the majority of workers either low skilled or unskilled.
Blunch et al., (2001) defines the business Organization as informal traditional sector that is highly heterogeneous in terms of the types of activities and encompasses a range of sub-sectors including manufacturing, trade, services, construction and transport. Mead et al., (1996) assert that it is like an elephant: we may not quite be able to exactly characterize its true nature but once we see it we have no doubt what is in front of us.
Balunywa (2003) defined the business (specifically sole proprietor) as that characterised by single ownership, under one person's control with unlimited liability, having undivided risk with no government control and has no separate entity from the firm. UBOS (2003) defines a the business as that employing less than five people. For purpose of this research a the business is defined as that employing less than five employees
According to De Gobbi (2003), the the scale businesses refer to the and micro Organization that lack sufficient collateral to cover the particularly high risks involved yet they operate with high transaction costs. To her they represent the large proportion of the economic sector in every country. They sometimes operate in the informal sector since many micro entrepreneurs are illiterate and have limited access to information, they are vulnerable and neglected group commonly composed of home working women.
However, international organizations such as the World Bank and the International Finance Corporations(2002), define The Scale Businesses as those that require the amounts of capital to establish, the number of employees or in most cases personally handled by the owner, and referred to as micro businesses hence to them they are "mini businesses" or "Bop businesses".
The European Union (EU) definition is based on the parameters of development, turnover and asset size and Organization for Economic Cooperation and Development (OECD) on employment and sales turnover. This implies that they play a vital role in alleviating poverty and increasing employment attributed to their promotion of competition and dynamism, since they augment government efforts in rural and urban areas thereby improving the household incomes which enables them to access various items for daily use at affordable costs. It is from this perspective that the scale businesses are dubbed as the the scale establishments since they operate at the least levels investment.
In Latin America, The Scale Businesses are characterized by the dependence on family labor and limited technical and managerial skills. They are commonly not registered, maintain no business records and do not have access to credit from formal credit institutions. They are relatively the, flexible, require low capital needs, modest educational requirements with informal structures that are high labor intensive and do depend on local raw materials.
According to Tacy, (2004) the the scale business sector in India has been accorded as a priority sector of the national economy by the national decision makers since it is protected and promoted in various ways by government policies and measures to enhance their growth potential. The Scale Businesses generate employment at relatively the capital costs, mobilize resources at micro levels and meet the rising demand for various goods and services required by the economy. To the decision makers, The scale businesses constitute nearly 40% of the total output in the private sector. Much more significant was the employment generation capacity of 70%.
In Ghana, the scale Organization are officially considered together. The Organization are defined as business units that employ a labor force of not more than 9 persons (Mensah et al, 2007).This is so because they augment government efforts to achieve economic growth and reduce poverty in the rural and urban areas through the promotion of competition and dynamism to enhance the development of low and middle income economies and individual.
According to Ayozie Daniel Ogechukwu(2009), the scale businesses are a seedbed of innovations, inventions and employment since they assist in promoting the growth of a country’s economy. Hence at all levels of government policies which promote the growth and sustenance of the scale businesses have been emphasized to enhance economic development.
In Uganda, UBOS (2006) defines them as components of the informal sector that make up the National economy since they operate with low level of organization, low capital, low technology and often temporary premises. They are not registered with the government and not supported by formal financing institutions. Further these are classified as household Organization which are economic units owned by the households but without an identifiable location. It is an informal establishment that usually employs about 10 employees as evidenced that 56% of the urban households were operating informal businesses (UNHS 2002).
The Scale Industries are characterized by the unique feature of labor intensiveness. The importance of the scale businesses increases manifold due to immense employment generating potential that is accompanied by fast decision making due to less staff and more control of an entrepreneur, availability and dependence on local raw materials leads to innovation of products which cater for the needs of individuals in a particular region hence their significance.
The Scale Industries are characterized by the unique feature of labor intensiveness. The importance of the scale businesses increases manifold due to immense employment generating potential that is accompanied by fast decision making due to less staff and more control of an entrepreneur, availability and dependence on local raw materials leads to innovation of products which cater for the needs of individuals in a particular region hence their significance.
2.1.2Record Keeping in Business Organization
Records are recorded information, regardless of physical form or characteristics, storage media or condition ofuse like cards,correspondence, disks, maps,memoranda, microfilm, papers, photographs, recordings, reports, tapes, writings and other data, information or documentary material. (Kegie, 2004)
According to the National Archives and Records Service of Uganda (2006), Records refer to recorded information, regardless of form, whether electronic or paper-based or medium, like cassette, disc and document. It can also be defined as a transaction preserved to be used as evidence in future due to the nature of information it contains. (Adams, 2003).
A record must meet several criteria that make it unique in relation to other types of information. Different researchers state the characteristics of a record as follows: Records are evidence of actions and transactions (Reed, 2005), Records are physical, have content, a structure or form, and are created in a context (Hofman, 1998), Records should support accountability, a principle that individuals, organizations, and the community are responsible for their actions and may be required to explain them to others
Record keeping is clearly essential to: good administrative decision-making, consistency and fairness, impartiality, continuous learning and improvement, and effective risk management (Tacy, 2004). Quality record keeping is critical and important for any kind of enterprise (Premaratne, 2002). The Blue Ribbon Committee (1999) in Gregory and Jeannot (2002) asserts that financial information should be acceptable and of quality. However, quality notion is relatively ambiguous and is potentially problematic (Krishnamoorthy, et al., 2002). Quality is often a subjective goal and its measurement is not an exact science but a continual process of discovery that emerges as a top competitive priority within the firms (Mangiameli and Reolthlein, 1999).
The FASB (1980) deems that financial reporting, which covers the mechanism for providing information about the financial condition, performance and importantly, risk profile of firms to all potential users, portrays relevance and reliability. Relevance is defined as the capacity of the information to make a difference in a decision by being predictive about the future and giving feedback values about the past performance (McDaniel et al., 2002). Reliability, on the other hand, is depicted when information is reasonably free from error and bias and faithfully represents what it purports to represent, thus embraces verifiability, neutrality, representational faithfulness as well as comprehensiveness of disclosure (FASB, 1980). It may be noted that financial reports, often the basis for quality measurement, are not prominent documents in SBEs. Consequently, in this study, quality reporting in SBEs was based on accounting data of type of record maintained and adequacy and up datedness of record keeping.
The Private Sector Foundation ed. (PSF, 2000) affirm that financial accounting in Uganda is characterized by poor quality. The PAN (1997) studies in some countries indicate a very the percentage of SBs that practice quality record keeping: Bargadesh (6 percent), Egypt (6 percent), Honduras (14 percent), Jamaica (16 percent) and Sierra Leone (18 percent). Yet the key to quality record keeping is a commitment to a good accounting system that grows out of an Acknowledgement of its value. Good record keeping, can greatly improve many of the management decisions a business owner should make, including decisions about borrowing, pricing and inventory.
For many the business entrepreneurs, the biggest problem is that of not knowing where to start with business records, so none are kept (Syracuse, 1994). Keeping accurate and up-to-date financial records is for many' people the most difficult and uninteresting aspect of the business operations. Most SBEs do not even keep the most basic cashbook and are thus contented with mental records about their costs, revenue and debt (Stover, 1997). Apparently, this is a phenomenon replete in many SBEs in Uganda. International Monetary Fund Mission (IMF, 1999) being in agreement with the aforesaid statement affirms that many SB entrepreneurs in Uganda appear ignorant about keeping books of accounts. Wabwire (1996) states that there is almost complete absence of record accounting in SBEs in Uganda. On the ground, Sejjaaka (1996) being in consonant with the ensuing discourse notes that there is poor level of record keeping in the country.
Welford & Prescott, (1996) state that record keeping supports the accounting function and enables the audit function. Financial record keeping provides the basis or foundation for accounting and introduces controls that protect essential audit trails. At the most practical level, if records are disorganized, it will take auditors an excessive amount of time to locate needed documents, if they can find them at all. Individuals guilty of embezzlement may deliberately allow financial records to become disorganized or to be stored in unsuitable conditions because this makes it harder for auditors to identify fraud.
2.1.3Role of Business Organization
In order to highlight the significance of the Business Organization in relation to the growth and development of a given economy the Business Organization have been variously referred to as the “engine of growth” Hill, T (1987). This stems from the fact that almost all countries that have focused on The Business Organization and ensures its vibrancy have ended up succeeding in the significant reduction and its attendant’s enhancement in the quality and standard of living, reduction in crime rate, increase in per capital income as well as rapid growth in GDP among others. (Charmes, 2000)
It has become increasingly apparent that the businesses are the engines that drive an integral part of a healthy national economy (Lynch and Giorgis, 1999). They are a vital spark in the economy, playing a big role in forward and backward linkages to large-scale Organization (Uganda Government, 2000). They (SBEs) account for 60 to 80 percent of the non-agricultural employment and contribute 20 to 50 percent of non-agricultural GDP (Charmes, 2000). They are a survival strategy for many African households, whose significance emerges out of economic crisis (Wabwire, 1996). The sector carries an immense potential of making an economy prosperous.
Development of new markets and products can only be achieved by an SSBE that has adequate capital to carry out activities like advertising so as to capture new customers and maintain the existing ones. To achieve this, firms need funds of which borrowing is one of the most common sources of fund. When one borrows he or she has to pay back with an interest of which these interest rates as per now are high leading to low performance of SBEs. That is, minimal development of new markets and products (Lumpkin & Dess, 1996).
The business Organization Increase employment, encourage a flexible decentralised economy and promote social inclusion (Konrad, 1998). They substantially contribute to the supply of consumer goods and services by preserving and fostering the image of competitiveness, mobility and risk taking (Beteman, 1999; Tyson, 1994). For both start- up ventures and existing firms, SBEs are carried on in pursuit of business opportunities, business expansion, technological progress and wealth creation (Lumpkin & Dess, 1996). Many SBEs are started with the desire to make a living, be self-employed and independent, satisfy inventiveness and obtain higher income or become wealthy (Barkham, 1990 andElkan, 1998).
2.1.4Quality of Service
A service is an activity or a series of activities of more or less intangible nature that normally, but not necessarily, takes place in interactions between the customer and service employees and/or systems of service providers, which are provided as solutions to customer (Barrow, 1992)
Quality of service or product is a key to long-term prosperity that reflects entrepreneurs' feeling of a job well done (Barrow, 1992). Quality has been claimed to be one of most critical success factors for organizations in recent years (Giuliano, 1995) Non-financial measures such as quality of service/product are relevant in cases where market based performance measures showing the total firm's value are not available. The service market is the ideal growth-vehicle for developing economies thus prompting the liberalized markets to rapidly shift to the service sector. (Charmes, 2000)
Mainuddin (2002) asserts that when a customer differentiates organizations as brands, it becomes sufficiently sophisticated to look beyond the product, to service. Through insisting on certain minimal level of quality, markets are assured. Therefore, providing incentive for quality of gradation/maintenance and ensuring survival of the SBEs. Alastair (1999) and Fitzgerald et al., (1994)measured quality of service/product basedon reliability, responsiveness, appearance, cleanliness, comfort, friendliness, communication, courtesy, competence, access, availability and security. These variables are exhibited in people, internal environment, product or service and/or the process of delivering it to customers and the only appreciable artifact of that effort is the memory the customer carries out of the exit (Zemke, 2003).
Quality of service may be perceived differently among individuals and/or firms based on tangibles, reliability, responsiveness, assurance and empathy (Parasuraman et al., 1988) yet it is influenced by the environment and specifically work place, irrespective of the industry. The environment sets a ceiling for the achievement of the set goals (Alastair, 2000). An environment is a dimension of uncertainty, instability and hostility and unfriendliness; thus low predictability influences the people's risk aversion and hence performance. African cultures are low on autonomy but high on embedded-ness and people are unwilling to master the environment but prefer to have and live with whatever they possess (Munene, 1997). Therefore, for purposes of this research, quality of service was measured based on work place environment, courtesy, accessibility and comfort. Self
2.1.5Record Keeping and Performance
Factors contributing to the unimpressive performance of Ugandan the scale businesses as mentioned in different studies are limited capital and limited access to finance. Tushabomwe. K (2006).
Given the businesses lack access to external finance, their decisions to upgrade their equipment and machinery by making new investments are further constrained by the limited internal sources of financing Ssewanyana et al (2007). Several papers indicate additional constraining factors such as inadequate provision of infrastructure, and services that affect the private investment unfavorable taxation systems, and heavy regulatory burden and administrative bureaucracy. Other authors mention limited access to differentiated markets, which might be related to a lack of forward linkages, the concentration of the scale businesses in low-quality production, high transport and transaction costs; corruption, low trust and minimalist entrepreneurs strategies, education and poor managerial and skill competence, weak support institutions, a lack of sector competitiveness, and an overall neglect a of the businesses in Uganda, Tushabomwe. K, (2006), Ssewanyana et al (2007).
Tushabomwe. K, (2006) says that Furthermore, when the scale businesses experience limited access to the market, their growth potential is likely to decrease. Thus, access to market is an important factor for the scale businesses to perform better and grow.
Keeping quality records is critical in determining the survival or failure of business (Mulurge, 2001). Stover (1997) observes that, "bluntly, a the business that fails to keep complete and accurate record keeping places its long term success and continuance in grave, grave doubt." Moreover, many SBs view accounting as an overhead that does not contribute to the bottom line (Mulurge, 2001). Inadequate record keeping has caused operational losses in many SBEs and has contributed to failure of duties between physical control of assets and liabilities. In the same vein, McMahon (1998) asserts that accounting of any sort horrifies many SB owners because it rarely seems to tell them very much and hardly ever seems to have much relevancy to current operations.
McCannon (2002) asserts that many SBs fail because managers did not keep adequate records and could not make timely and important management decisions. Empirical studies by Gibson (1992), Gibson and Wallsschutzky (1992), and McMahon (1998) show that many SBE owners use financial information rather to determine whether their capacity to generate future profits has been impaired, than to run their businesses more efficiently and cost-effectively. Flusche et al., (2001) assert that without quality record keeping, the firm's competitiveness can be jeopardized. USAID (1996) affirms that weaknesses in improving the quality of record keeping and internal management of resources impede enterprise performance.
2.1.6Challenges faced by the scale businesses
Despite the nation’s economic recovery, a number of serious constraints have hampered the role of the scale businesses to adjust towards globalization and this has restricted them to making low quality products for low returns in the markets. The following factors account for the poor performance of these businesses in the area of study.
Poor Infrastructure:The major barrier to business success is the lack of infrastructure and the high costs associated to its development for the administration and location of the business activities nevertheless the ones available are also expensive in terms of rent as some are not easily accessible especially for the case of roads in more remote areas (Barney, 1991; Peteraf, 1993). Minimal efforts are being undertaken as improvements for the potential to stimulate business development in Kampala, including a public transport system that would allow people to move more easily within the areas of operation for the businesses.
Financial Problems: The Organization make an important contribution to economic output and employment in developing economies. While estimates vary greatly depending on definitions, the World Bank suggests that almost 30% of employment in low-income countries is generated by the informal economy, while an additional 18% is provided by (formal) the and medium Organization. Together these two groups contribute 63% of the GDP (Ayyagari, M., T. Beck and A. Demirguc-Kunt, The and medium Organization across the globe: A new database, World Bank Policy Research Working Paper 2007). Finance is lifeblood of any enterprise irrespective of its size. The businesses face more problems in raising finance, as the provider of finance may not find the return on investment interesting as compared to large enterprise, and also the entrepreneurs are skeptical about repayment.
Chijoriga and Cassiman (1997) pointed to finance as a key constraint to the growth of the scale businesses. Ngobo (1995) further made analysis of finance as a constraining factor for lack of working capital, wrong choice of financiers, high interests payments, frauds, corruption, lack of financial control, an absent of costing systems and delay in release of funds by banks or financiers. Obviously, the professional approach is missing on the part of owners/managers and promoters, hence there are no concepts to monitor and control the financial affairs of these businesses with time.
Improper business Feasibility:This factor acts mainly at the initial stages of the project and is based on the decisions of the entrepreneurs. Many projects and businesses are affected at birth because of inadequate feasibility reports regarding the demand of product in various markets, wrong choice of technology, improper forecasting of financial requirements, delayed in supply of plant and machinery or in their installation or release of funds by financiers. No clear vision, goals and objectives. The root of all these problems may be traced to the lack of expertise in business planning and management on behalf of entrepreneurs and promoters (Lockett and Thompson, 2001; Jacobides and winter, 2007).
Lack of Managerial Knowledge:According to Harper (1994), the formation of the scale businesses the owners can easily run the business but as it grows and ages, managerial demands rise. These are in the form of operational managerial requirements like production, sales and finances and most importantly the ability to deal with them yet this is a hunch to them. Harper clarifies that entrepreneurship goes beyond management since entrepreneurial skills are part of managerial skills.
The majority of entrepreneurs are unaware about the knowledge of managerial field. Therefore, they are performing the non-managerial tasks rather than the tasks of managerial functions such as planning, organizing, leading and controlling (Barney, 1991). Indeed, in this dynamic world the informal sector needs qualified professionals to handle the various activities of business affairs more effectively and efficiently. It is clear that, the sound knowledge of managements is a key to success which is lacking in the the scale businesses (Sleuwaegen and Goedhuys, 2002).
Poor Educational Background or Lack of Education:The research study reveals that most of owners/managers have a very poor educational background, as majorities are un-educated. In this scenario, entrepreneurs of the the scale businesses in the region of study are never comfortable at their business units since they lack suitable training, and leadership skills to sustain their operations in the various areas of accounting, marketing, technological processes and development as well as administration and management. It should be noted that SMEs are never facilitated at the cost of development hence operational shortcomings (Fafchamps and Minten, 2002).
Out-Dated Technology:The methods of production which the the businesses use are old and inefficient. This results into low productivity, poor quality of products and high costs. The entrepreneurs lack information about modern technologies and training opportunities which concerns them. There is little research and development in the field yet the pace of change has developed new innovations and introduced new technology that is basically mechanized and requires less labor as a concern which is much faster today the scale business units cannot survive and withstand the global competition since they depend on cheap labor, adopt simple labor intensive technologies and keep the pace with changing situations because they cannot afford to purchase the highly expensive mechanized machines for their productive activities but rather sustain their competitive advantages(Lockett and Thompson, 2001).
Poor Marketing Strategy:The-scale businesses also faced the acute problem of marketing their products. (Barney, 1991). The problems arises from such factors as the stocks, lack of standardized products, inadequate market knowledge, competition from technically more efficient units, deficient demand, etc. Apart from the inadequacy of marketing facilities, the cost of promoting and selling their products too is high. The result is large and increasing subsidies which impose heavy burden on the government budgets.
Increasing Competition:Some businesses possess dynamic capabilities that give them a comparative advantage in innovations (Barney, 1991). Competition from large scale businesses gains them credibility with licensing and taxation and enhances their access to rationed resources; can easily out-price and out-sell the the businesses thus contributing to improved performance (Sleuwaegen 2002). SMEs can benefit from networking effects, better infrastructure and larger markets relative to their rural counterparts (Fafchamps and Minten, 2002).
It is suggests that business performance depends not only on the returns of specific strategies, but also on the cost of implementing those strategies. This explains, for example, behavior and decision making such as diversification, market entry and exit and innovation, among others. This is usually attributed to the formal Organization since it is difficult for competitors to know the causes of other businesses’ efficiency and they face costs associated with efforts that exhibit superior performance that retains their position over others for a given period (Barney, 1991).
Gender Inclusiveness in MSMEs Development: Women in Uganda make up more than 50% of the labour force and are an important pool of potential talent to help the country meet its development goals, especially in the area of entrepreneurship and micro, the and medium Organization, (Tushabomwe. K ,2006) . However, it is generally known that women face more challenges than men in starting, managing and growing their Organization as they are more likely to be impeded by a lack of the necessary capacities, skills and resources. Although Uganda has made some important advancement in women’s entrepreneurship development since the early 2000s, the challenges facing women entrepreneurs have not changed much. Some studies reveal that over the last 10 years, the growth in the number of women-owned businesses has outpaced that of male-owned businesses by 1.5 times, majority of which are in self employment.Women have alsobeen more disadvantagedthan men dueto legal impediments, established cultural norms and attitudes about women’s roles. Their limited mobility due to domestic responsibilities does not give many women time to concentrate on their Organization.
Uncoordinated Structure of MSME Sector: Presently, the MSME sector is highly fragmented which undermines competitiveness, growth and sustainability of the sector. As a result, the MSMEs do not have a single common voice and forum for effective policy dialogue to and influencing policy in lobbying government support. This can be attributed to weak internal capacities of associations representing MSMEs and the liberal policies that lack industry to industry supplier linkages and development. A strong and coordinated apex body to strengthen and enable MSMEs to cope successfully within globalization for increased flows of Foreign Direct Investments (FDI) is needed including facilitation of linkages between larger Organization and MSMEs.
Limited Access to Quality Assurance &Affordable Product Certification Services: MSMEsface the challengeof costly processfor their productCertification and Standardizations. This puts MSMEs in a disadvantageous position within local, regional and export market access of their products and services. In reality, many of them cannot comply with the present minimum requirements due to limited capital.
The Dominant Informality of the Sector: The majorityof Organization withinthe micro, theand medium sectoroperate informally. This high incidence of the informal economy in all its aspects is a major challenge for the achievement of growth and expansion of the Organization, enterprise productivity, and working conditions and has a negative impact on the development of sustainable Organization, public revenues and government’s scope of action, particularly with regard to economic, social and environmental policies, the soundness of institutions and fair competition in national and international markets.
Inadequate technical and business skills: Whereas the country has been blessed by the increasing number of academic and training institutions, there is still a gap in the entrepreneurship, technical and management skills. Developing these skills will engender enterprising persons who should be equipped to fulfill their potential and create their own businesses.
2.1.7 2.1.4BANKING IN NIGERIA:
Banking in Nigerian has undergone revolutionary stages after the establishment in 1892, of the first bank which was then called The Africa Banking Corporation, the subsequent failures of banks in the country, arid followed up by the passing of the first ever banking legislation in 1952.In other words, banking business in Nigeria dates back to 1892. In 1894, the African Banking Corporation was acquired hy British Bank of West Africa (BBWA). The Baclays Bark D.C.O. which followed later was set up in 197 Although several other banks were later established with only a few ultimate survivors, the Nigerian banking system did riot find its proper footing until the establishment of Central I3ank of Nigeria.
The first Nigerian banking legislation in 1952 could be regarded as the basic step to the development of the banking industry in Nigeria although it did not help much in checking abuses in the industry. According to Nwankwo (1987 P, 56) "we may therefore, conclude that the second phase in the evolution of commercial banking in Nigeria was one in which the only banking law, while preventing under capitalized banks from establishing or--4.L operating, was really incapable either of developing the banking system or of preventing the worst malpractice and abuses in banking". Therefore, in order these abuses, in July 1959, Central Bank of Nigeria stated "indeed to all intents and purposes, 1959 can be regarded as a watershed in the annals of Nigerian banking".
It was also in 1959 that the foundations 1961 Ever since, the Nigerian banking system has come of age - from its prehistoric period to date. The industry has carried out for itself a unique status among all the known commercial ventures. Little wonder, the Supreme Court of United States of America declared in 1974 that banking is a specific line of commerce. The uniqueness of the banking industry is so much that it stands out to .be one of the most regulated and supervised industries in the world economic. The banking system in Nigeria has undergone various stages. During the oil boom, banks in the country were mainly concerned with performing their traditional functions which were mainly extension of loans, advances and collection of deposits: There was not much competition at this time and as such no much innovations. However, with the oil boon1 gone, it dawned on bankers to look inwards and be innovative in their services.
The changing economy of Nigeria has had sporadic effects on banking. Beginning from the take-off of the Central Bank, the Banking sector has been responsible for mobilization.
2.2 Theoretical Framework
2.2.1 Organizational theory
This theoryconsists of many approaches to organizational analysis. Organizations are defined as social units of people that are structured and managed to meet a need, or to pursue collective goals. Theories of organizations include rational system perspective, division of labour, bureaucratic theory, and contingency theory.
In a rational organization system, there are two significant parts: Specificity of Goals and Formalization. The division of labor is the specialization of individual labor roles, associated with increasing output and trade. Modernization theorist Frank Dobbin states "modern institutions are transparently purposive and that we are in the midst of an evolutionary progression towards more efficient forms". Max Weber's conception of bureaucracy is characterized by the presence of impersonal positions that are earned and not inherited, rule-governed decision-making, professionalism, chain of command, defined responsibility, and bounded authority. The contingency theory holds that an organization must try to maximize performance by minimizing the effects of varying environmental and internal constraints.
Dwight Waldo noted in a review of field work in 1978: "Organization theory is characterized by vogues, heterogeneity, claims and counterclaims",[1] and even greater differentiation in theory and practice have developed since then. Organization theory certainly cannot be described as an orderly progression of ideas, or a unified body of knowledge in which each development builds carefully on and extends the one before it. Rather, developments in theory and prescriptions for practice show disagreement about the purposes and uses of a theory of organization, the issues to which it should address itself (such as supervisory style and organizational culture), and the concepts and variables that should enter into such a theory.
2.3 Empirical Review
Oluwafemi (2019) investigated on The importance of Small and Medium Enterprises (SMEs) in many economies cannot be over emphasized as they play vital roles in the economy of both developed and developing countries such as employment generation and poverty reduction among others. However, majority of SMEs have failed to recognize the importance of well-structured accounting system that would have enabled them keep accurate financial statement. The study set out to analyse the extent to which accounting information is being used to measure the financial performance of SMEs. Questionnaires were administered to 200 SMEs owners out of which 197 questionnaire were valid and analysed using Likert scale. It was observed that while respondents agree that major benefits of keeping proper records is to know the performance of the business and that record keeping is key to the success of the business, majority of the SMEs owners lack basic accounting knowledge and decry the cost involved in preparing financial statement hence they keep the records themselves manually. The study recommends that SMEs operators should endeavour to keep proper records and where necessary seek the services of SME professionals to do so at minimal cost because the cost involved in business failure as a result of lack of proper record keeping far outweigh the cost of good record keeping for a business concern.
Boaz (2015) investigated on the relationship between the record keeping and performance in small business enterprises in Uganda. The study was guided by the following objectives;to examine the availability of record keeping in small business enterprisesin kikubo, to assess the relationship between record keeping and performance in small business enterprises in kikubo and to identify the Challenges Faced by Small Scale Businesses in kikubo.The study adopted a case study design with both qualitative and quantitative approaches .a sample size of 60 respondents was taken and this was purposively and randomly chosen. The study established that World Vision International should advocate for participative budgeting and that Feedback is an important role of budgeting for attaining the expected quality and standards in planning control and leadership and staffing that it is important to consider their implications on budgeting and financial planning at World Vision International - Nakasero headquarters.And the study recommended that there is need to properly and adequately finance all the programmes of World Vision International Nakasero Headquarters. This requires that; Donors are sought and encouraged to donate more finances in form of grants and confessional loans and put in place credit recovery measures required to recover all credits from government ministries employees and institutions that consume the services and fail to pay as expected.
Generally, these results indicated that Budgeting Process was a significant factor among those that affected the Budget performance and capacity of service delivery at World Vision International Nakasero Headquarters and the study concluded that there was a significant relationship between Budgeting Process and Budget performance at World Vision International Nakasero Headquarters.