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PROBLEMS OF
STATE-OWNED ENTERPRISES
Abstract
This
research work is a field survey research design, which was conducted to find
out the Problems Facing State-Owned Enterprises in Enugu State “A case study of
Presidential Hotels, Enugu and Nike Lake Hotels (Protea Hotel) Enugu”. The objectives of which to ascertain the role
of advertising in creating mass awareness for the enterprises and to know
whether the timing of these enterprises is well notified in our government
enterprises, to ascertain the factors underscoring the current problems of
state-owned Enterprises. And at the other
hand, to facilitate this study, the researchers selected all the staff of
Presidential Hotels and Protea Hotels (Nike Lake) in Enugu State rounding to
219 in number. The researchers used questionnaire in collection of data from
the respondents. These were arranged as
whether yes, no, no idea, good, fair, bad, poor, very poor or even very
good. After the investigations, some
findings were made, there are observed that promoting and creating of mass
awareness should be the responsibility of government agents, getting the
services needed at the right time is a poor managerial ability and non-payment
of staff salaries affects the staff appreciation of their job and the most
effective of all the findings was government interference, which many of the
respondents said yes to and which causes the major problem of state-owned
enterprises. We therefore recommend that
government should look into the problems of state-owned enterprises and look
out solutions to the possible problems.
CHAPTER I
INTRODUCTION
“PROBLEMS OF STATE-OWNED ENTERPRISES IN ENUGU STATE (A CASE STUDY OF
PRESIDENTIAL HOTELS AND NIKE LAKE HOTEL (PROTEA HOTEL), ENUGU.
1.1 Background of the Study
The history
of state-owned enterprises or state involvement in business enterprises dates
back to the period of British administration in Nigeria.
Ibie (1970:27) revealed this
information and according to him, he grouped the enterprises into four and
declared that the history did not come by choice rather by patrimony. During this period and according to customs,
the British administrations were kept in charge of the colonial public sectors. This group includes the utility service
industries, education, water, health, electricity etc during the wake of
political independence, these state-owned services were retained automatically
by the indigenous public sector. The
second groups were the foreign private sector who were previously in charge of
the three chain factors of production – management, capital and
entrepreneurship. This was a situation
where the distributive trades were largely in the hands of the foreign private
sector.
After independence, it was felt that to
allow the expatriate community to be in charge of the means of production and
distribution would conquer or subdue the sovereignty of the country to
neo-colonialism. But despite the anomaly
created by this group, things were redressed by the indigenization measures of
the seventies and this went a long way in enlarging the participatory and
regulatory roles of the public sector.
According to Ibie, the third group was
borne out of the post independence desire, which was buttressed by the in surge
of the oil wealth of the public sector in order to enhance the progression of
economic development by playing a catalystic role in strategic sectors where
the indigenous private sectors was still feeble to take initiative . This was
the justification for the public sector to make significant impact into iron
and steel development, petroleum etc.
The fourth and final group of these
business group was that of thorny spinners, which was regarded by public
officers as not being creative in private sectors. It was felt that a thrust into this business
would be expanding the revenue generating base of the public sector with the
hope of operating and managing them as efficiently and as profitably as the
private sectors were doing. The belief
gave rise to the public sector ventures in such organizations like Hotels.
Despite all this, it was the general
believe that the nationalists that took over the administration of country
after independence in 1960 were faced with the theory problems of galvanishing
the different segments of the economy for the achievement of rapid
technological and industrial growth. It
is the belief also that in most growing economics, money was in short
supply. Also in addition, skilled
personnel was short and private investment was very low.
However, today we have several federal
and state owned enterprises such as Protea Hotel (Nike Lake Hotels) Enugu,
Airport and Presidential Hotels etc respectively.
Ugwu (1994:35) revealed that
Presidential Hotels was established in 1980 by Eastern Nigerian Development
Co-operation (ENDC) with its branches at Enugu, Onitsha, Abakaliki, Aba, Owerri
and Obudu in Cross-River State and Enugu was the headquarters. The hotels were establishment as catering
rest house with the purpose of catering for government officials then in the
colonial administration. It was not a
commercial venture when it was set up under the Eastern Nigeria Development
Cooperation (ENDC). The catering rest house was later changed from catering
rest house to progress Hotels by Ojukwu when he was made the governor of the
Eastern region (1966-1967).
Between 1930 and 1945 under catering
rest house and progress Hotels, the establishments were made a non-commercial
venture because of subvention or grants it was receiving from the government.
Another change was made again during Ukpabia Asika administration. At this stage, it was changed from Progress
Hotels to Phoenix Hotels. But it was still
under the umbrella of East Central State and these hotels catered for both
governmental and non-governmental purposes.
During the period when Anambra and Imo
State were created in 16th March 1976 by General Murtala Muhammed, these hotels
later changed to Paramount Hotels. Later
during the year 1980 and 1985, the Paramount Group with the branches in
Onitsha, Enugu and Abakaliki were merged with Hotels Presidential Limited Enugu
to form Anambra Hotels Limited. The
merger was for administrative convenience because the Paramount Hotels Group
retained their internal working structure throughout the period.
Then from 1986, the administration of
Anambra hotels group regained its autonomy.
Protea (Nike Lake Resort) Hotels is a form of hotel industry where
rendering services to the public are affordable. It also has other forms of
attraction like featuring of golf, swimming, skipping and outdoor services that
attract vacationers.
Most resort Hotels are built near
streams, mountains or oceans while some are in Islands and they serve as
vacation spots for all human race. Resort Hotels also provide according to the
book “encyclopedia” volume 9, services that are cheap and affordable.
1.2 Statement of the Problems
The continuous interference by
government affected the growth and maintenance even the management of the
organization.
Secondly, the issue of prompt payment
of staff salaries is a negative problem and government is known for not paying
her staff salaries as at when due. There
is also the problem of training. The
state government even federal government finds it difficult sending her staff
on training and lack of this affects the manpower planning of the
organization. Manpower planning is one
of the major management problems facing state owned enterprises. It is a function of personnel of the
organization. This means aiding in the
development of manpower forecasts and models the organization. If training is not there, it creates a big
problem.
There is also the issue of financial
problem. the proliferation of
state-owned enterprises at the state level in the last decades couple with
their virtually continuous dismal economic and financial performances have
worsened the financial problem of state-owned enterprises in the whole world.
We also have poor capitalization
problem. One wonders why government
owned profit oriented enterprises are unable to attract loan, finance from the
bank institutions. Whereas their private
sector counterparts command line of credit with relative ease from the same
financial institutions.
In addition, where such loans are to be
made, the financial houses ledge against possible by insisting that the
perspective government guarantee such loans.
Moreso, we have the problem of unstable management boards. Every new administration, military or
civilian begins by dissolving owned enterprises or companies and appoint new
members to replace them. The civilian
administration sees these board appointments as patronage for those who
supported them in the election. The
appointment are hardly ever based on merits, the military who usually come into
government on a corrective platform, see an early necessity to replace these
civilians appointees as part of the programme to remove or reduce corruption in
public life. As the case may be, we
equally have the problem of integrity factor.
Our government owned enterprises or rather state-owned enterprises have
performed badly over the years and this is due to the fact that they are being
run by corrupt officials. The integrity
factor, no doubt worries quite a good number of knowledgeable and
public-spirited Nigerians. These and
more are the problems of state-owned enterprises and efforts to remedy them
have not yielded any fruitful results.
Given the numerous problems inhabiting
the efficiency of state owned enterprises in Nigeria generally, Presidential
Hotels and Protea (Nike Lake) Hotels Enugu in Particular the need for a study
of this nature is not in doubt.
1.3 Objective of the Study
The research aims to study the problems
of state owned enterprises in Nigeria and Enugu in particular with specific
references to both Presidential Hotels and Protea (Nike Lake) Hotels Enugu.
As a more detailed level of analysis,
the research will focus on the following issues:
(i) To ascertain the role of
advertising in creating mass awareness for state-owned enterprises amongst
public.
(ii) To know whether the timing of
state-owned enterprises and the demand for them are well synchronized in the
government parastatals.
(iii) To ascertain the factors underscoring
the current problem the enterprises are having and to establish ways in which
the staff can be effectively used to secure and maintain confidence and
acceptance of state-owned enterprises.
(iv) To improve understanding on the
nature and role of management and their job.
(v) To look at the staffing as it
affect state-owned enterprises.
(vi) To make recommendations to the
government.
1.4 Significance of the Study
Giving the overriding importance of
state-owned enterprises for the growing population and for the speedily
development in hotels in Nigeria a big challenge to government policy planners
to formulate far-reaching and appropriate policy in the hotel sector.
The marketing agencies in the
state-owned enterprises are challenged equally to devise a better marketing
means so that customers could be given the right services at the right time and
at normal prices.
More so, a critical look at the
problems of state owned enterprises is expected to bring about some short
coming that are connected with service on the basis of which flesh solutions
and means may be given.
Therefore, we sincerely hope that the
recommendation that will be emerging from this study shall inject a new scope
of operational efficiency into the state-owned enterprises front in Nigeria and
positively adjust the nations food deficit balance sheet and other economic
problems.
1.5 Research Questions
Question I: Have you ever been dissatisfied with the
attitude of the services of this enterprises?
Question
II: How do you consider the services
of this enterprises to the public?
Question
III: Does non-payment of staff
salaries affect the management of this enterprises?
Question
IV: Is government interference the
major problem facing the state-owned enterprises?
Question
V: Each time you are in need of the
enterprise’s services do you normally get it at the right time?
1.6 Scope of the Study
The study of which is the problems
facing state-owned enterprises in Enugu State.
The research work is specifically based on two selected areas in Enugu
State, which are presidential hotels, Enugu and Protea Hotels Enugu but was
called Nike Lake Hotels Enugu earlier on.
This study tries to find out solutions to the existing problems of
state-owned enterprises, which includes non-payment of staff salaries,
government interference, which is the major problem, inability of the public to
get the required and needed services at the right time, lack of staff training,
promoting and creating of mass awareness etc.
These problems makes it difficult for the state-owned enterprises to
render services when needed and government do not have a say in the problems
facing the state-owned enterprises, thereby causing great problem in the
economic development and economic growth.
1.7 Limitations of the Study
This study is limited to Enugu
State. It covers two areas in Enugu
State, namely: Presidential Hotels and Protea Hotels (Nike Lake Resort), which
were selected on the basis of convenience.
It is however believed that there are no major differences between the
system of operation and problems facing both these state-owned enterprises
since they are operated under the same economic conditions.
1.8 Definitions of Terms
(i) STATE-OWNED ENTERPRISES: These are
establishment that are established by government to render public services to
the people.
(ii) MANAGEMENT: This is the act of running or
controlling a business or similar organization.
(iii) HOTEL: A building where people stay usually
for a short time, paying for the services rendered to them like paying for
their rooms and their meals.
(iv) ENTERPRISE: A large company or business
developed by the people of a country mostly by he government.
(v) PROBLEM: A thing that is difficult to deal
with or to understand. A question or
thing that can be answered by using logical thought or mathematics.
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