An Evaluation of the Impact of Management Crisis in Nigeria Financial Institutions

An Evaluation of the Impact of Management Crisis in Nigeria Financial Institutions

ABSTRACT

Sequel to the growing rare of economic activities and the consequent need to meet up with the expanding roles of financial institutions, the equally increased rate of management crisis has equally generated an alarming level of disturbance to the global financial world. The issue of an increased level of production and the resultant nationalization of the economy gave room for the level of management crisis being experienced today in our financial institutions.

The promise under which these factors are persuasive is examined by the investigation. This inherent crisis will no doubt continue to contribute to management crisis in our financial institution if not checked.

The second premise is that of technological advancement, which came with it, computer, electronic transfer, and so on.

The fraudulent premise, which is an age-long system of grand, still contributed substantially to the level of management crisis in financial institutions in Nigeria.

It is however the opinion of the investigator that the understanding of the dynamics of the crisis is lacking in the financial institution’s system the obvious discovery of this research is that the authorities and managers of financial institutions including the stakeholders in this sector are involved in the management of crisis rather than being involved in crisis management.

With the increasing rate of closure of banks and financial institutions in Nigeria, I continue that there is no effective tool and machinery for crisis management in the financial institution system.
In this direction, the excessive involvement in rivalry, competition instead of the comprehensive total growth of all financial institutions in Nigeria makes them engage in smatter ways of out wetting the others.

This is very unhealthy to the sustainable growth of the institutions.

Moreover, a careful study of what the NDIC (Nigeria Deposit and Insurance Corporation) has done was X-rayed and the discovery recommended for better financial institutions system.

United Bank of Africa (UBA) as a financial institution has been chosen as a proper representation of financial institutions administration in the country as this is a case study of this investigation.
Most outstanding crises will be identified by this research and those are peculiar to UBA in addition to all other general situations in the financial institutions will be identified what has led to the discontinuity and constant instability in the banking sector in Nigeria is not unconnected with the spate management crisis and fraudulent crisis in this important sector.

TABLE OF CONTENT

Title Page
Approval Page
Dedication
Acknowledgment
Abstract
Table Of ContentsChapter One
1.0 Introduction
1.1 Background Of The Study
1.2 Statement Of The Problem
1.3 Objective Of The Study
1.4 Research Question
1.5 Statement Of Hypothesis
1.6 Significance Of Study
1.7 Scope Of The Study
1.8 Limitation Of The Study
1.9 Definition Of Terms
ReferencesChapter Two
2.1 Review Of Related Literature
2.2 The Consequences Of the Management Crisis In Nigeria Financial Institutions.
2.3 Remote And Manifest Causes Of Management Crisis In Nigeria Financial Institution.
Reference

Chapter Three
3.0 Research Design And Methodology
3.1 Research Design
3.2 Date Types
3.3 Date Location
3.4 Population Size
3.5 Sample Size
3.6 Method Of Data Presentation
3.7 Data Analysis
References

Chapter Four
4.0 Data Presentation And Analysis
4.1 Introduction
Reference

Chapter Five
5.1 Finding
5.2 Recommendation
5.3 Conclusion
Bibliography
Appendix

CHAPTER ONE

1.0 INTRODUCTION

Management crisis characterizes the Nigeria banking including, Many financial development institutions the imperativeness of management crisis in the Nigeria development financial institutions cannot be therefore be overemphasized. Suffice this to say that the enormity of growth in this sector and the need to meet up with the changing roles of financial institutions have made the development rapid.
Management crises are bound to be experienced when one examines the changing roles like banking operations and processes, commercial banking, corporate banking, public sector, consumer banking, treasury and financial institutions, credit risks management, and so on.

Due to the heavy loss being experienced in most financial institutions a study of the management crisis is apt. Some notable banks have had their license withdrawn, savanna bank plc. Being the most recent. The 2002 annual financial report of one of the biggest banks’ first bank plc narrated the loss of over 10 million Naira. These and more are management crises dangerously affecting the Nigerian development of financial institutions through the prevalence of management crises.

1.1 BACKGROUND OF THE STUDY

Financial institutions play pivotal roles in the evaluating of sustainable development anywhere in the world. The need for the study of the subject matter becomes more imperative in the banking industry in Nigeria for as the cheese that lays the golden eggs, economic growth and development of the nation rest squarely on it.

Banks account dominantly for a financial institution in Nigeria as a result, a review of the forum of
management crisis vehemently exists in banks in Nigeria include the following.

Industrial relations

Poor management techniques

Shortage of equipment

Staff inadequacy

Industrial unrest

Fraud

Ignorance of modern information technology management of change in information technology.
These factors had been the development of financial institutions in Nigeria.

In this era, the banking industry is undergoing a transformation driven by the changing political climate deregulation, the economic use of technology Local and Foreign Competition, and increasing customer sophistication. Banking whose ones would characterize these factors had to be selected ie UBA PLC. This choice is informed by the old nature of incorporation on Feb 23 1961 with the introduction of mobile banking services in 1963. The bank introduced UBA GARD with 234 branches in Nigeria and America. It has trained 3832 numbers of staff in Local and international courses. This investigation requires such a bank that has continued to restructure the earning assets with a selective reduction in aggregate credit volumes and on the liability side has secured a good share of the public sector deposits. The research requires bank whole total assets in 2001 stood at N188 billion. The bank equally won the Euro Money best Domestic Bank in Nigeria. The bank which in 2002 was also named by the new fork based global finance magazine as the best trade finance bank in Nigeria for the second year running, one of the only two banks that won the award in Africa the issues of management crisis in Nigeria financial institutions development are believed by experts to be the people in the organization. Any business organization boosts the people in that organization as its greatest assets in the outfit. It equally follows that an organization especially a financial institution can only be as good as the people you employ.

Therefore, the institution should appreciation the individuals that make it up and recognize and appreciate the value of their participation. It is ironic, however, that some institutions lack this giving room to possible fraud and unleashing vendetta on the institution by her employees who nevertheless are agitated by such state of affairs.

It noted by (Ene 1984) “As the organization grows, its human resources must also be seen to grow with it and develop to their maximum capacity”. The issue of uncreative remuneration has been ignored by financial institutions and the collapse of some of them. This gave rise to the sudden realization by new financial institutions develops which now place a very high premium in remuneration making the Nigerian financial institutions highly very attractive recently. The sudden upsurge of the emergence of financial institutions in Nigeria is yet to witness a corresponding failure rate of such banks. (Financial Institution) the lack of attractive incentives does not promote the efficiency of employees in the bank because when people are trained, they become efficient on the Job thereby increasing their productivity and that of the financial institution. Such efforts should receive corresponding lucrative remuneration (Double 1999) “It will be pertinent to state categorically that crisis in the banks and other financial institutions have become the order of the day in the past and research has proved that despite the increase in the number of banks and institutions lucrative remuneration seems to have stemmed the tide institutions lucrative remuneration seem to have stemmed the tide of such occurrences to a minimal level to the surprise of skeptics”.

1.2 STATEMENT OF PROBLEM

The evaluation effect of the management crisis in Nigeria’s financial institution development is high may negative in that it has also made this sector highly vulnerable to the problems.

1. There now exists a high rate of instability in the banking sector as threats of liquidation face the strong ones ordinary would not think of such negative development.

2. Another problem associated with it is a discontinuity in the banking industry ranging from the inability to meet CBN requirements to the situation where demanded remuneration by workers and interest rate demand by customers cannot be met by the financial institutions and banks, especially the community banks, etc.

3. Bank distress account too for one of the negative effects of financial institutions’ development hinged on management crisis because even the community banking system, some of these banks still weather the storm and are afloat. Savanna bank plc case terrifies the incidence of distress which is a pure management problem.

4. Complete dissolution of some banks. This Eneh (1984) identified too as the evaluation effects on management crisis in that the problem could be due to financial management crisis or an offshoot of the political crisis on government policy objectives like indigenization.

1.3 OBJECTIVE OF THE STUDY

The research objective is the further evaluation of the evaluation effects of management crisis in Nigeria financial institution development. Consequently, the under-listed objections are pursued by this research as follows.

1. To identify and further analyze those resultant effects which management crisis has on financial institutions development especially in the United Bank for Africa Plc (UBA).

2. 10 workers’ attitude to financial institutions development and the consequent administration to explain the extent of their involvement.

3. To identify and evaluate those variables to lead to management crisis in the development of the financial institution in Nigeria especially UBA Plc.

4. To examine the prospects of Nigeria’s development financial institutions inductively through the investigative and to adduce recommendations for the effective crisis management in financial institution economic development in Nigeria.

1.4 RESEARCH QUESTIONS

For the research, the following research questions are adopted.

1. How does management crisis effects, development of institutions in Nigeria.

2. What factors constitute a management crisis in the development of the financial institution in Nigeria.

3. What normally forms the financial institutions works perception of management crisis?

4. How would an adequate answer be provided to the issues of key variables in the development of financial institutions in Nigeria such as assisting in providing insight into the kind of measures ensured effective and efficient crisis management?

1.5 STATEMENT OF HYPOTHESIS

These testable hypotheses are geared towards in-depth examination of the research investigation.

These are null and alternative hypotheses in this investigation represented as (Ho) and (H1) respectively.

They are as follows:-

1. Ho: Instability is not one of the management crises that affect the Nigerian financial institution.

H1: Instability is one of the management crises that affect the Nigerian financial institution.

2. Ho: Fraud does not negate development in Nigeria’s financial institutions.
Ho: Fraud negates the development of Nigeria’s financial institution.

3. Ho: Financial management crisis does not lead to bank distress and consequent dissolution of banks.
H1: Financial management crisis bring discontinuity in Nigeria financial institution.

1.6 SIGNIFICANCE OF STUDY.

The research is imperative in the following areas and will immensely benefit Nigeria’s financial institutions in general and the banking industry in particular. It proffered solutions and suggested ways and measures of better crisis management and control in a developing economy such as one.

Management crisis is a regular feature of every organization and therefore non-financial organizations will equally ripe the fruits of this investigation since this study will provide ways and tools of crisis management in organizations.

Academically, students and those engaged in financial studies in addition to evolved in financial management and project analyst in financial matters will find this research on management crisis.

However, it could also be clearer that this study needs more enterprising investigation to illuminate this area i.e management crisis as a dangerous virus besetting the Nigerian financial institutions especially banks which has become turbulent owing to the infiltration of all manner of management crises into the system. These significances will no doubt instigate the intensity of intending researchers in the financial institution area.

1.7 SCOPE OF THE STUDY

The investigation however reflected on the numbers fact of management crisis that has characterized the financial institution’s development in Nigeria more so when the resultant effect has been the withdrawal of licenses by NDIC and the sudden denial of peoples (Culture) deposit in such banks thereby casting expressions on the nation’s financial institution.

United Bank of Africa Plc (UBA) as a case study whose management services sector crisis of medical services sector crisis of Amen resources and Training, industrial relation, medical services, classified Asset management, legal services, and registration department. The administrative measure strategies effectual management crisis and identify possible management crisis that could affect the institution, their evaluation effect on the development of the financial institutions and they’re like the hood of occurrence. The research however attempted to develop management crisis tools that would benefit and minimize the probability of such incidence in Nigeria financial institution development.

1.8 LIMITATION OF THE STUDY

It is however instructive to mention here that in the course of the sample survey conducted by this researcher, it was discovered that few up-to-date material/literature that deals with management crisis could be found. The confidentiality and absolute secrecy with which data unfavorable and sometimes favorable to an organization is treated in Nigeria need much to be desired. Reference to headquarters for delicate information has characterized my visits to the UBA Plc Enugu, which is on adequate representation for financial institutions in Nigeria.

Finally, financial and time constraints prevented this researcher from visiting all the banks in the country for first-hand information in critical independence in the area of management crisis one existence in the banking industry.

At UBA Plc, the management Director directly oversees financially critical strategies management, general administrative, corporate affairs, and properties with the management of the bank’s interest finding and exchange rate risks, as well as tracing of foreign currency. This is to forestall fraud and enhance crisis management in the bank serving, the managing director proves impossible but relentless efforts will still be made to actualize this research.

Definition of terms

Terminological confusions are avoided through the conceptualization of terms. Certain keywords are met along the line, which may be given different interpretations for this study therefore, the following working concepts are operational zed thus.

CRISIS
Ugorji (1989) described crisis, as “an unusual situation of the outcome of which is uncertain or capable of generating conflict. The loss of financial resources accompanying such development in the financial institution.

MANAGEMENT
Double (1996) noted and described management as the creation of an enabling environment to achieve the goals of an organization” it’s per articulation, formation and implementation goes a long way to ameliorating the problems of financial institutions, especially the banks.

BANK FRAUD
Bank fraud can be defined as a conscious or deliberate effort aimed at obtaining unlawful financial advantage at the detriment of another person who is the rightful owner of the fund “described Orjih (1996) this could involve a collection of positions” money or the bank’s assets and finances. Leaden advantages are sometimes taken of the changing political climate, deregulation of the economy, and the use of technology to an incident such as frauds.

Bank Distress
In his description, Orjih (1994) described bank distress as when it is unable to meet the bank examination rate system” management crisis is usually the problem of distress in banks.

BANK
Campton (1979) described it as “a person or company on the business of receiving money, and collecting drafts for customers subject to their obligation’s though the banking industry is undergoing transformational innovations characterized by increased duties and responsibilities in addition to the traditional roles banks had played in the past.

CRISIS MANAGEMENT
Ugorji (1989) described crisis management as any measure that plans that remove the risk and uncertainty from a given situation and thereby allows one to be more in control of one’s destiny are needed a form of crisis management”

DEVELOPMENT
The emergency of a new quantitative state of the object of its composition and structure.

REFERENCES

1. Orjih, J (2002) Element of banking, Nigeria. Pock Communication, Pg 234.

2. Ugorji, R. (2003) Management crisis in a business organization.

3. Campton, E (2004) Principles of Banking, Printed in USA Pg 38

4. Ene C (2003) The Nigeria Economic crisis, causes and suggested solution” The Nigerian Banker, vol 4, No. 1 May, Pg 38.

5. Double, P (2002) Management in Business Times Vol. 21 No 34 April Pg 17.