THE EFFECTS OF GOVERNMENT CONTROLS ON COMMERCIALIZED COMPANIES (A CASE STUDY OF NIGERIA POSTAL SERVICE COMMISSION NIPOST PLC ENUGU STATE)

ABSTRACT

This works is a comprehensive assessment of the effects of government controls on commercialized companies in Nigeria. For an indept study, a case study which represents an aspect of a large experience is used, hence Nigeria postal service commission Ltd (NIPOST) Enugu was selected as the case study.

The methodology employed involved the use of two assets of questionnaires, administered on the customers and the employees of the company in addition, some management staff were interviewed. All findings were critically analysed and presented. Chi-square and the percentages were the main statistical tools used in analyzing data and in testing the hypothesis.

It was discovered that because of the government controls these organizations lack adequate and functional autonomy to carry out their commercial operations. Yet, these government owned enterprises financed their commercial activities. Besides, government has licensed private sectors to compete with these commercialized state ventures.

It is thus recommended that the commercialized government enterprises should be given the required independence to carryout their commercial activities, against when they are continued being monitored by the government.

TABLE OF CONTENTS

CHAPTER ONE

1.0       Introduction                                                               

1.1              Background of the study                                                       

1.2              Statement of problems                                                                       

1.3              Purpose of the study                                                  

1.4              Scope of the study                                                                             

1.5              Research questions                                                                             

1.6              Limitation of the study                                                                      

1.7              Significance of the study                                                                   

CHAPTER TWO    

2.1       Literature review related to the topic                                    

2.2       Appointment of board and top management                         

2.3       The importance and effects of commercialization                 

2.4       The absence of functional autonomy in a

commercialized company                                                       

2.5       Competition                                                                           

2.6       Summary of the literature review                                          

References                                                                             

CHAPTER THREE

3.0       Research methodology                                                          

3.1              Research design                                                                                 

3.2              Area of study                                                                         

3.3              Sample techniques and procedures                            

3.4              Instruments used for data collection                         

3.5              Validity and reliability                                                                       

3.6              Reliability of the instrument                                                  

3.7              Methods of data collection                                                    

CHAPTER FOUR

4.0       Data presentation, analysis and findings                   

4.1              Introduction                                                                           

4.2              Data presentation / analysis                                       

4.3              Interpretation of the result                                                     

CHAPTER FIVE

Summary recommendation and conclusion                           

5.1              Summary                                                                                            

5.2              Recommendation                                                                   

5.3              Conclusion                                                                                         

5.4               Suggestion for further research                                             

Bibliography                                                                          

Questionnaire                                                                                                                                      CHAPTER ONE

1.0       INTRODUCTION

1.1              BACKGROUND OF THE STUDY

The definitions and meaning of commercialization, commercialization is taken to mean the transformation of the public enterprises into vibrant and responsive business devoid of the usual bureaucratic bottlenecks that are identified as the zone of public enterprises.

According to Odike (2001) managerial economics he saw commercialization as an economic concept in which government owned businesses are expected to pay their way. This means that they have to cover their cost of production from the revenue they derived after sales. The decree No 25 of 1988 defined it as the reorganization of the enterprises in which such commercialized enter prizes shall operate as profit making ventures without any subvention from the government.

This can also be seen as a logical follow up to the bureaucratic controls and moving the economy closer to a free market system.

There are various stages of commercialization that is partially commercialized enterprises and fully commercialized enterprises, and it is pertinent to distinguish clearly the differences between fully commercialized and partially commercialized ones.

A fully commercialized enterprises is expected to e self sufficient in both its recurrent as well as capital expenditure needs. 

Where their normal operation would not generated the level of resources needed from capital development, hey should be capable of raising funds from the capital market based on the quality of the balance sheet.

Enterprises to be partially commercialized are expected to operate like full-commercialized ones in terms of better management and profit orientation. But because of the public nature of the goods and services provided by these enterprise and in order to keep prices of products or services as low as possible for public interest government provides financial grants for their projects. The enterprises would be expected to earn enough revenue to cover their operational cost.

In both full and partial commercialization enter prizes will enjoy considerable autonomy and will have the power to operate on strike commercial bases subject to the regulatory powers of government.

1.2              STATEMENT OF THE PROBLEMS

The commercialized parastatal are expected to operate under the same broad terms and conditions as any private enterprise. Their relationship with the government through their relevant ministries should be on a similar basis as that of management with shareholders. But according to Molokwu (1999) with full or partial commercialization the basic trouble wit public cooperative will remain government interference.

Against this background, this research work seeks to identify the major effects on governments controls on commercialized companies.

The first of these is that government still appoint the boards and top management of these commercialized companies of which NIPOST is among. These appointments are not based on consideration for high moral integrity and technical enterprises to ensure that only those who can provide meaningful direction for the progress of these enterprises are appointed. Most members of the staff usually see such appointment to top management as unkind imposition of strangers into positions which ought to be held by candidates with relevant qualifications and experience.

Secondly NIPOST fully finance its operations yet some protective decrees still remain.

These decrees do not afford NIPOST the freedom of charging truly commercialized prices for its services.

Thirdly, because of some policy impediments in the system, the commercialized enterprises have not resorted to the capital market in order to cover their resources gaps.

Fourthly, many of NIPOST exchange were and are still being built on the basis of political expediency rather than on economic rationality. These exchanges have a Slurin chance of ever becoming profitable. 

Fifthly, there is the problem of working without the attention of the interests grows and to the federal nature of the country (ie federal character).

Sixthly, for commercialization to be a success government must start a new culture of not eating of its cake and wantonly to have it. therefore, if the spirit of commercialization must pick up and be sustained, governments and their agencies must pay for their own accumulated bills.

1.3              THE PURPOSE OF THE STUDY 

The study intends to achieve the following objectives

i.                    To identify how government owned commercialized companies could grant adequate functional autonomy to carryout their commercial operations.

ii.                  To redesign government owned commercialized companies on the limes of the best business practice.

iii.                To advocate for commercialization that could be exposed to market forces characterized by he competition

iv.                To find out if the companies have the autonomy to charge truly commercial prices for their services to meet the increasing cost of their operations to achieve efficiency.

v.                  To give them the independence to re-examine their workers remunerations and make appropriate adjustment in line with the existing economic reality in other to reduce temptation toward fraudulent acts   

vi.                To proffer solutions that may help in enhancing the commercial dispositions of these companies.

1.4              SCOPE OF THE STUDY

Massive intervention of the state in the economy has been generally one of failure. Consequently, the search for a major redirection in the role of the state in the economy has become a universal issue. As a result of the relevance to examine one unit of a larger whole due to the nature of the study, a case study approach which represents an aspect of a larger phenomenon is used, hence. This study was carried out in NIPOST in Enugu Metropolises of Enugu - State.

1.5              RESEARCH QUESTIONS

i)                    What is the impact of government control on commercialized companies.

ii)                  Do commercialization help in he improvement of the nations economy?

iii)                Does commercialization contribute to the improvement / increment in the unit of production of companies?

iv)                Has it helped in increasing the rate of employment in the country?

1.7       THE SIGNIFICANCE OF THE STUDY

The aim of this study is to x-ray the problems being encountered in government’s controls and regulations on commercial operations of government owned commercialized companies. The research is very relevant and necessary because it will enable the policy makers to remove unnecessary bureaucratize controls and move the economy closer to a free market system characterized by competition.

Also, the information contained in this research project will be of immense value not only to academic, but also to economic planners, policy makers, investors / shareholders, governments who bright have been unaware of the effects of governments controls and regulations on commercial activities of the commercialized companies.

To academics, the research will help to provide or stimulate thought in carrying out further studies in areas related to re-direct in the role of the state in the economy. Similarly, to the policy maker and economic planners, the findings and recommendations in this project will be of significant value and assistance since they will then be better placed to understand that government control and regulation of commercialized companies need to be re-examined and curtailed.