information communication technology (Ict) on corporate performance: A case study of cement manufacturing firms in Nigeria

Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) Vol.1(8) pp. 259-263, September, 2012 Available online http://garj.org/garjmbs/index.htm Copyright © 2012 Global Advanced Research Journals Full Length Research Paper Impact of information communication technology (Ict) on corporate performance: A case study of cement manufacturing firms in Nigeria Fidelis A. Ayatse Department of Business Administration, Federal University of Agriculture, Makurdi, Nigeria Email: ayatsefidelis@yahoo.com Accepted 31 August 2012 In the world over ICT has emerged as one of the major tools used by corporate organizations for optimal performance because of its effective and efficient application in business operations. This becomes necessary for organizations that want to survive to embrace ICT in all ramifications. Despite the enormous investments in technology and information system in recent times, demonstrating the impact of such investments on organization’s corporate performance has proven difficult. The study was motivated by observational sought to show the impact of ICT on corporate performance focusing on six (6) cement plants in Nigeria. Research questions and objectives were stated and literature massively red from other empirical work on contributions of ICT to organizational performance in Nigeria. The population for the study comprised of staffs (6,080) of six cement industries where 375 were selected using Yaro Yamane’s formula as sample size for the study, however, only 300 questionnaires were successfully completed and returned and they were use for descriptive statistics, in order to ensure validity of the instrument (questionnaire), experts and friends were given the study for assessment and a pilot study was carved out on two cement industries not selected for the study. Responses, rate of responses and simple percentage (%) were presented in tabular form for critical analysis. The conclusion was drawn that ICT has positively contributed to corporate performance, recommendation on improved investment and control in ICT were given and finally the researchers proposed future grey areas for research such as the impact of ICT investment on revenue and market share, and optimal level of investments for firm’s ICT. Keywords: Information communication technology, corporate performance, Manufacturing firms INTRODUCTION The introduction of computer and advent of internet has to the extent that timely access to information could save changed the way we live in the modern world. To be a life while improper management of information could successful in the 21st century, companies must take lead to huge problems and losses of opportunities. advantage of the new information technology especially Information technology and systems have in internet and globalization (Ayatse, 2006). Modern revolutionized firms and industries, becoming the largest innovations have led to the description of the age in component of capital investment in many industrialized which we live as “the information age.” Information societies. Information systems are transforming business technology and Management therefore plays a vital role and the visible results of this include the increased use of 260 Glo. Adv. Res. J. Manag. Bus. Stud. Table 1. Breakthrough of sample size used for the study Cement Manufacturing Industries Population Sample size Benue Cement Company (BCC) 1000 62 Lafarge Cement Industry 821 51 Unicem 804 50 Ashaka Cement 658 40 CCNN 297 18 Obajana Cement Company 2500 154 Total 6080 375 Table 1.0. Age distribution of respondents Response Frequency Percentage of response (%) 18-30 120 40 31-45 150 50 46 and above 30 10 Total 300 100 Source: Survey data, 2012. cell phones and wireless telecommunication devices, a massive shift toward online news and information, booming e-commerce and internet advertising, and new Federal security and accounting laws that address issues raised by the exponential growth of digital information. The internet has also drastically reduced the costs of business operating on a global scale. According to Laudon and Laudon (2007), these changes have led to the emergence of the digital firm, a firm in which; most of the firm’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. Information systems are essential for conducting day- to-day business as well as achieving strategic business objectives. Nigerian cement industries would be non existent without information systems. Some service industries such as finance, insurance, and real estate industries could not operate without information systems. In the 1950s, business embarked on the first widespread use of computers primarily as tools for recording and processing accounting transactions. This ICT has only really been a part of industries for about the last 60 years. Nonetheless, ICT is one of the most important resources in today’s business environment and successful businesses are investing heavily in ICT (Hagg, Cummings and Dawkings, 1998). The ongoing diffusion of Information Communication Technology ICT among firms is a current example of the dynamics of technological change and economic development (Koellinger, 2006). The effects of ICT on corporate performance are subject to debate because not all studies have demonstrated clear payoffs from ICT investments. Also, the results vary depending on how performance and ICT payoffs are measured and analyzed. For example, one empirical study finds positive impacts of ICT investments on productivity, but not on profits (Hitt and Brynjoifsson, 1996). Another study did not find positive effects of ICT capital on productivity, while ICT labor positively contributed to output and profitability (Prasad and Harker, 1997). An analysis of the profitability of ICT investments in an empirical study that explicitly considered the competitive dynamics in a market showed that the profits of non-adopters of ICT are reduced as other firms adopt new ICT. Furthermore, the gross profit gains of ICT adoption are related to firm and industry characteristics and the number of other users of the technology (Stoneman and Kwon, 1996). It is in recognition of the contribution of information communication technology (ICT) to corporate performance of this country and the fact that there is need for the diffusion of information on impacts of ICT which led to an increased awareness of the value of information systems in Nigerian Industries and business. However, concerted attempt to match this increased awareness with profitability of ICT investments of the campaign have been minimal giving rise to an information gap. It is in realization of the need to bridge this gap that this research work was carried out to assess the impact of Information Communication Technology (ICT) on Corporate Performance among cement manufacturing firms in Nigeria. The specific objectives are to: i. examine how cement manufacturing industries in Nigeria use ICT in conducting business. ii. examine the impact of ICT on profitability trend in Cement Manufacturing in Nigeria. Ayatse 261 Table 2.0 Sex Distribution Response Frequency Percentage of response (%) Male 215 72 Female 85 28 Total 300 100 Source: Survey data, 2012. Table 3.0 Educational/Professional qualification Response Frequency Percentage of response (%) SSCE 28 9 OND/NCE 150 50 B.Sc/HND 72 24 Post-Graduate 50 17 Total 300 100 Source: Survey data, 2012. Table 4.0 Work experience Response Frequency Percentage of response (%) 1-5 40 13 6-10 210 70 11 and above 50 17 Total 300 100 Source: Survey data, 2012. iii. ascertain how Cement Manufacturing Industries in Nigeria have improve on their production system with the adoption of ICT. iv. determine the impact of ICT on corporate performance of cement manufacturing industries in Nigeria. v. determine how ICT have affected cement industries’ relationship with their customers. METHODOLOGY The study was conducted on the operations of selected cement manufacturing firms in Nigeria. These cement companies include Dangote Cement Company DCC (formally Benue Cement Company), Dangote Cement Company (Abajana plant), Ashaka Cement, Unicem, Cement Company of Northern Nigeria (CCNN) and larfarge cement. The research work was descriptively design in order to evaluate the impact of ICT (independent variable) and corporate performance (dependent variable). The population of the research is made up of 6080 respondents comprising strictly the staffs of 6 leading cement manufacturing industries in Nigeria. The individual sample size per company was determined using the population allocation formula as specified by Bourley (1964) nh =n.Nh where; nh = sample size per each company Nh = Total no of employees in each company N = Total population size n = Sample of the population used for the study. This study used a total sample size of 375 respondents as shown in table 1 below. Data obtained through structured questionnaires that were administered by trained Enumerators to the 375 respondents yielded the cross sectional data for analysis. Data for the study were analyzed using descriptive statistical tools such as table, frequency and percentages for data analysis (Aburu, 2010). The Findings The preservation and analysis of data is based on quantitative as well as qualitative approaches. 262 Glo. Adv. Res. J. Manag. Bus. Stud. Table 5.0 Whether Nigerian cement factories make use of ICT \ Response Frequency Percentage of response (%) Yes 300 100 No 0 0 Not sure 0 0 Total 300 100 Source: Survey data, 2012. Table 6.0 Whether ICT improved corporate performance of cement manufacturing industries in Nigeria. Response Frequency Percentage of response (%) Yes 300 100 No 0 0 Not sure 0 0 Total 300 100 Source: Survey data, 2012. Table 7.0 ICT has improved customers’ interactions and satisfaction in the cement industry. Response Frequency Percentage of response (%) Yes 190 63 No 95 32 Not sure 15 5 Total 300 100 Source: Source data, 2012. Percentage breakdown is used to present facts collected from respondents in a tabular form. The researchers distributed 375 copies of questionnaires to be filled by a sample size of 375 persons comprising staffs of 6 cement companies (DCC), Lafarge Cement Company, Unicem, Ashaka Cement Company, Cement Company Northern Nigeria (CCNN) and Obajana Cement Company. The analysis and conclusion of results is based on the number of duly completed and returned questionnaires which was 350 representing 80% success. From table 1.0 above, 120 or 40% of respondents were in the age bracket of 18-30, 150 or 50% were between 31-45 and the remaining 30 or 10% respondents were from 46 and above. This indicates that the majority of the respondents were between 31-45 years, by implication the respondent were matured enough to respond accurately to the questionnaires. Table 2.0 above shows that, 215 or 72% respondents were male at the remaining, 85 or 28% respondents were female. This shows that male form large segment of the sample population. From the table above, 28 or 9% respondents were secondary school graduates, 150 or 50% were OND/NCE holders 72 or 24% were graduates, while the remaining 50 or 17% were post graduates. This shows that the majority of the staffs of the cement companies in Nigeria were OND/NCE holders. Table 4.0 above shows that, 40 or 13% respondents work with Cement Company from year 1 to 5, 210 or 70% work from 6-10 years while the remaining 50 or 17% work from 11 years and above. We therefore, conclude that majority of cement companies’ staff work from 6-10 years which indicates adequate relevant experience for the study. Table 5.0 shows that 300 or 100% agreed with the use of ICT in cement industries in Nigeria, while none of the respondents claimed no or not been sure. We then concluded that, all cement factories in Nigeria embraced ICT. Table 6.0 above shows that, 300 or 100% respondents agreed with improved productivity as a result of ICT application in cement industries while none of the respondents claimed no or not being sure we therefore, concluded that, application of ICT to cement industries would increase productivity. The table above shows that 190 or 63% of the respondents agreed with improved service delivery by Ayatse 263 cement industries as a result of ICT application, 95 or 32% disagreed while the remaining 15 or 5% were not sure. This shows that, application of ICT in cement industries improved quality service delivery. CONCLUSION From the foregoing it can be deduced that Nigerian cement manufacturing industries embraces the use of ICT in all their departments and processes. ICT have greatly improved corporate performance of cement manufacturing industries in Nigeria positively. It was also seen that production in Nigerian cement manufacturing industry improved significantly since the advent of ICT. In terms of corporate governance and financial reporting, the financial implications of losses associated with insufficient information for strategic decisions could be great on corporate entities when quantified in monetary terms and this has led several companies to invest in finding better ways of improving on information systems. ICT has also improved customer’s interaction and satisfaction in these industries. Aside the positive impact that ICT has on corporate performance, it was also observed that the relationship between investments in ICT by Nigerian cement manufacturing industries and their productivity trend is positive. RECOMMENDATIONS In this study we recommend that industries should embrace ICT in all facets of their processes and dealings as business responses to changes in their environment are enhanced through digital communication. Also the ability of a firm to use ICT is becoming intertwined with the firm’s ability to implement corporate strategy. 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