CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Every management’s decision stems from a clear definition of its corporate strategic plans for the entire establishment. Nowadays; some business organizations have not fully recognized the tremendous benefits and importance of planning and forecasting in their organization. Without plans, planning activities have no real effect.

For any organization to succeed in today’s business environment, there must be a mapped out steps, and objectives that guides their activities towards achieving her set goals in the business arena. These steps and objectives is what is known as planning and forecasting.

Planning simply entails making adequate preparation or arrangement for the future. It is set of material activities designed to prepare the enterprise for the future and ensure that decision regarding the use of people and resources help in achieving the enterprise objectives. Planning is deciding in advance what to do, how to do it, and who is to do it.

Forecasting on the other hand entails estimating or predicting how something will be in the future. The business environment has past the era of commencing any business activities or transaction prior to looking into the after-math of the business whether it will benefit them or not.

In today’s business some people jumps into business world without minding the rate of planning and forecasting due to the believe that says “with money all things are possible” and also believed that they are man enough to handle anything which is very wrong and also an abuse to the business concept. They fail to realize that success cometh not by assumption, but by real planning forecasting.

Planning and forecasting are two variables that any organization cannot do without in today’s business environment because they need to foresee the future in order to plan for it. The benefit of planning and forecasting to any organization is that it equips an organization to foresee circumstances as well as helping them in mapping out long-term strategies.

Planning and forecasting is an effective tool for management and helps in achievement of the goals of the organization. Organizations that overlook the impact of planning and forecasting has less chance of survival in the labour market because planning and forecasting is the most basic of all management functions.

This study is conducted to provide an insight on “impact of planning and forecasting on business organization using Guinness Brewery Lagos, Nigeria as a case study”. To achieve the objectives of this study, the paper is divided into five interconnected chapters.

Chapter one deals with the background of the study, statements of the problem, objectives of the study, significance of the study, research questions, research hypothesis, scope and limitations of the study, and definitions of terms.

The next chapter presents the review of relevant literature which include: historical background of Guinness Brewery, concept of planning and forecasting, meaning and nature of business, necessity of planning and forecasting in business organization, relationship between planning and forecasting and organizational better decision making, Forecasting as an aid to planning, the impact of planning and forecasting on business organization, Benefits of planning in project management of any organization, strategic planning and forecasting, and limitations of planning and forecasting in business organization. Chapter three examines the research methodology used in the study which are: introduction, research design, study area, population of the study, sample size and technique, method of data collection, research instruments, reliability and validity of instrument, techniques of data analysis and decision criteria for validation of hypothesis.

Chapter four deals with the presentation, analysis and interpretation of data.

While the final chapter examines the summary of the findings, conclusion, recommendations and bibliography.

1.2 STATEMENT OF PROBLEM

It has obviously been that “he who fails to plan, plans to fail” and it is also believed that he who fails to put records and recognizance of past event should not predict/ forecast future if anybody that fails to envisage the future is bound to crash.

Planning and forecasting have been integrated to be wonderful tools for effective management. Since touch is used in darkness. We also believed that business dwell in the world of dynamism and unsteady – setting, which called for effective use of planning and forecasting.

It can also be seen as an eye of every business that wants to grow in a competitive environment.

Even the Bible says, “where there is no vision, people perish” in this context vision, which is sight in modern business management, is planning and forecasting. Moreover, Hosea 4: 6 said, “my people perish for lack of knowledge of planning and forecasting. It is because of inadequate knowledge of planning and forecasting. It is because of these present problems and eminent problems, which many businesses are encountering and also will encounter in future, that make the researcher to delve into this topic “impact of planning and forecasting on business organization”.

Planning and forecasting is a norm that must not be treated in isolation in every business organization but unfortunately, organizations tend to overlook the power of planning and forecasting due to some silent reasons which this research work is going to find out.

1.3 AIMS/OBJECTIVES OF THE STUDY

The objective of the research project is to thoroughly investigate on the impact of planning and forecasting on business organization using Guinness Brewery Lagos as a case study. Other objectives of this study include:

1. To examine the effect of lack of planning and forecasting on business organization.

2. To evaluate the negative and positive impact of planning and forecasting on business organization.

3. To identify the benefits of planning and forecasting on business organization.

4. To examine the problems associated with planning and forecasting on business organization.

5. To expatiate on the factors that pose a challenge to the effective application of planning and forecasting on business organization.

6. To proffer relevant solutions to the challenges of planning and forecasting on business organization.

1.4 RESEARCH QUESTIONS

The key objectives of this current study were developed into a set of questions for the research project. As a result, the study addressed the following key research questions:

1. Does lack of planning and forecasting have any effect on business organization?

2. Are there any negative and positive impact of planning and forecasting on business organization?

3. What are the benefits of planning and forecasting on business organization?

4. What are the problems associated with planning and forecasting on business organizations?

5. Are there some factors that pose a challenge to the effective application of planning and forecasting on business organization?

1.5 RESEARCH HYPOTHESES

A hypothesis is a tentative statement which shows causal relationship that exists between two or more variables. Such declared tentative statement is subject to acceptance (confirmation) or rejection, depending on the results that fall out from its empirical verification. (Dode, 2012)

The formulated hypotheses in this research work include:

Hypothesis One

Null Hypothesis:

Ho: Planning and forecasting cannot be used as a tool for attaining organizational efficiency.

Alternate Hypothesis:

Hi: Planning and forecasting can be used as a tool for attaining organizational efficiency.

Hypothesis Two

Null Hypothesis:

Ho: Planning and forecasting has not helped in better decision making in a business organization.

Alternate Hypothesis:

Hi: Planning and forecasting has helped in better decision making in a business organization.

Hypothesis Three

Null Hypothesis:

Ho: The use of planning and forecasting has not led to high productivity and growth on business organization.

Alternate Hypothesis:

Hi: The use of planning and forecasting has led to high productivity and growth on business organization.

Hypothesis Four

Null Hypothesis:

Ho: Planning and forecasting has not helped business organizations to adjust and adapt to changes in the dynamic business environment.

Alternate Hypothesis:

Hi: Planning and forecasting has helped business organizations to adjust and adapt to changes in the dynamic business environment.

1.6 SCOPE OF THE STUDY

The study provides insight into the impact of planning and forecasting on business organization using Guinness Brewery Lagos State, Nigeria as a case study.

It seeks to examine the effects, needs importance and roles of planning and forecasting on business organization as well as to understand the factors that have impeded planning and forecasting on business organizations and to proffer relevant solutions to them. This study also seeks to understanding the positive and negative (if any) impact of planning and forecasting on organizations.

1.7 SIGNIFICANCE OF THE STUDY

The following are the significance of this study

This research work will be a useful guide to all business organizations both private and public and the economy as a whole as it exposes the impact of planning and forecasting on business organization as well as noting the major factors that could militate against its successful application.

This study will also serve as a benchmark especially to managers as it will help them to facilitate attainment of goals efficiently and helps to adjust and adapt to change in the dynamic business environment/

It will further call to the attention of the government to discover the impact of planning and forecasting and its related importance as a tool for attaining good efficiency, productivity and accountability in the country and economy.

It will also be significant to families and society at large as it educates and informs the people on how to plan their daily activities.

Finally, it will also serve as a back bone and an eye-opener to other scholars and researchers interested in carrying out further research in this or related domain subsequently, if applied will go to an extent to provide new explanation to the topic.

1.8 LIMITATIONS OF THE STUDY

In the course of this research several factors posed a limitation to its success.

Finance was one of the major factors that played a devastating role in preventing the researcher to use certain approaches and methods in the course of the study. Also, the researcher had a time problem because the available time was share between academic work, domestic responsibilities etc. it was not easy to attain a perfect balance among these activities as such very little time was available for the conduct of this study.

Availability of material were among the limitations encountered by the researcher because The employees are unable to disclose some information about the company which made some difficulty in writing the research work. They refused to give out some information which they considered confidential, hence the bulk of materials used were limited to the ones available that the researcher could assess.

1.9 DEFINITION OF TERMS

• Management: - this is the application of human and material resources in achieving the objective and efficiently through planning and forecasting.

• Manager: - it is a person that makes use of the material and human resources of an organisation in achieving their objectives.

• Planning: - it is the act or process of making plan. Planning is a major component of the management process, which is concerned with defining ends, means and conduct at every level of organization life.

• Forecasting: - to say that one thinks will happen in the future based on information that he has now.

• Organisation: - it is a system of behaviour designed to enable human and their machines accomplished goals. Organisation is also defined as the sum total of the way in which it divides the labour distinct tasks and them achieves co-ordinates between them.

• Business: - this is any economic activity oriented towards producing goods and services at profit for the satisfaction of mankind.

TABLE OF CONTENT

PAGE

TITLE PAGE i

CERTIFICATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

RESUME vi

TABLE OF CONTENTS vii – x

LIST OF FIGURES xi

CHAPTER ONE: INTRODUCTION 1

1.1 Background of the study 1 - 4

1.2 Statements of the problem 5 - 6

1.3 Objectives of the study 6 - 7

1.4 Research questions 7 - 8

1.5 Research hypothesis 8 - 10

1.6 Scope of the study 10

1.7 Significance of the study 10 - 11

1.8 Limitations of the study 12

1.9 Definitions of terms 13 - 14

CHAPTER TWO: LITERATURE REVIEW 15

2.0 Introduction 15

2.1 Historical background of Guinness Brewery 15 - 17

2.2 Concept of Planning and Forecasting 17

2.2.1 Planning 17 - 22

2.2.2 Characteristics of Planning 22 - 26

2.2.3 Steps in Planning Function 26 - 30

2.2.4 Planning Process 31

2.2.5 Forecasting 32 - 33

2.3 Meaning of Business 33 - 34

2.3.1 Nature of Business 34 - 37

2.4 Necessity of Planning and Forecasting in Business

Organization 37 - 43

2.5 Relationship between Planning and Forecasting and

Organizational Better Decision Making 44

2.6 Forecasting as an Aid to Planning 45 - 47

2.7 Impacts of Planning and Forecasting on Business

Organization 47

2.7.1 Positive Impact 47 - 51

2.7.2 Negative Impact 51 - 55

2.8 Benefits of Planning and Forecasting in Project Management

of any Organization 56 - 59

2.9 Strategic Planning and Forecasting 59 - 62

2.9.1 Description of the Strategic Planning Process 63 - 74

2.10 Limitations of Planning and Forecasting on Business

Organizations 75 - 76

CHAPTER THREE: RESEARCH METHODOLOGY 77

3.1 Introduction 77

3.2 Research Design 77 - 78

3.3 Study Area 78

3.4 Population of the Study 78 - 79

3.5 Sample Size and Technique 79

3.6 Method of Data Collection 80

3.7 Research Instruments 80 - 81

3.8 Reliability and Validity of Instrument 81 - 82

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION 83

4.1 Introduction 83

4.2 Data Presentation and Analysis 83 - 98

4.3 Test of Hypothesis 98 - 106

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION 107

5.1 Introduction 107

5.2 Summary 107-108

5.3 Conclusion 108

5.4 Recommendation 108-109

Bibliography 110 - 116

Appendixes 117 – 122

LIST OF FIGURES

Figure 2.1: Planning Process 31

Figure 2.2: Framework for Formal Planning and

Forecasting 62

Figure 2.3: The Strategic Planning Process 64