CHAPER ONE

1.0 INTRODUCTION
Individuals have needs and business organizations exist to satisfy the needs and
wants of the society. An appropriate method toward understanding form of
business ownership will require the provision of conceptual framework for the
word BUSINESS.

1.1 BACKGROUND OF THE STUDY

Business in a capitalist economy can be described as the sum of all the activities
involve in the production and distribution of goods and services for profit. This
definition implies that business assume responsibilities for two of the basic
human activities; Production i.e. Fabrication of physical objects using men,
machine, and material and distribution of these product/service as the consumers.
The second implication of the definition is that all business organizations should
strive to make profit. They are not charitable organizations; they must make
profit in order to survive and continue to provide employment for workers and
good returns to the owners.

Functionally, Business means those human activities, which involve production

or purchase of goods with the objective of selling them at a profit. In the work of
Griffin and Ebert (1996): “Business is an organization that provides goods or
services in order to earn profit”. With this definition, business activity through
the provision of goods and services aim to generate profit. An institution is to
produce profit when “total revenues” in a period is higher than the “total cost” in
the same period. Profit is the main feature of any business activity.

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1.2 STATEMENT OF THE PROBLEM

The major focus of this study is to find out the extent at which business activity
is influence by its environment. To this end, the study will address itself for a
number of specific problems, which includes the following;

 The extent to which business activities are independent of some of the

forces of the environments.
 The influence of the environment on business activities.

1.3 OBJECTIVES OF THE STUDY

The objectives of this research are as follow;

i. To determine if problems are created by the influence of business

environment in an Organization.
ii. To recommend solution on environmental problems as they affect
business.
iii. To recommend measure(s) in order to make the environment more
conducive for business.

1.4 RESEACH QUESTION

The major question of the research is highlighted below:

 Does the business environment on the Organization create problems?

 What are the necessary steps to take to tackle problems affecting the
business?

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  What are the measures to take to make the environment more conducive
for business?

1.5 RESEACH HYPOTHESIS

The following are the hypothesis of the study

HYPOTHESIS I
H0: Business environment creates problems for the organization.

H1: Business environment does creates problems for the organization.

HYPOTHESIS II

H0: The problems affecting business location can be tackled.

H1: The problems affecting business location cannot be tackled.

HYPOTHESIS III

H0: There are measures to take to avoid future problems.

H1: There are no measures to take to avoid future problems.

1.6 SIGNIFICANT OF THE STUDY

The study will help the public and the private organizations realize the
importance and the effects of the business environment. This study will also
help x-ray the problem of losses experienced by firms using wrong statistics in
establishing a business in an unfriendly environment, which usually leads to the

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folding of such companies. The recommendations will help to minimize the
frequency occurrence of company liquidation and smoothen operations of the
organization increase in production and to yield more profits.

1.7 SCOPE OF THE STUDY

The study will look at the effect and impact of business environment on Ama
Breweries, Enugu. It will also look at the general view of business as applicable
in drinks and beverages companies in Nigeria with emphasis on the type of
internal and external environment, during the year of 2018.

1.8 LIMITATION OF THE STUDY

Poor willingness of cooperate: The researcher could not get the detailed
information required for the project writing, as the respondents were
unnecessarily secretive. After much persuasion and convincing to prove the
research is for only academic purposes, the respondents agreed to cooperate with
the researcher.

Time constraint: This was another limitation to the study, due to other
academic activities of the researcher. The researcher decided to dedicate his
weekend for the research work.

Finance: Lack of financial resources and capital took a toll on the carrying
out of the research work, but the researcher was able to get financial assistance
from his close friends and family members to carry out the research work
effectively.
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1.9 OPERATIONAL DEFINITION OF TERMS

BUSINESS: - Business involves when an individual or organization that

provides goods or services in order to earn profit”. With this definition, business
activity through the provision of goods and services aim to generate profit. An
institution is to produce profit when “total revenues” in a period is higher than
the “total cost” in the same period. Profit is the main feature of any business
activity. Griffin and Ebert (1996).

ENVIRONMENTAL FACTORS: - It is the totality of forces and entities that

surround and potentially affect the growth and development of an organization.
Environmental forces can be divided into two; Macro and Micro environments

MICRO ENVIRONMENT: -These are the immediate environmental factors of

the business organizations e.g. the employee, shareholder, customer, etc.

MACRO ENVIRONMENT: -These are the forces that the organization cannot
control or influence or manipulate, e.g. demography, national or physical forces,
etc.

BUSINESS LOCATION: -This is geographical area where the business

organization is being influenced by the micro and macro environment factors.

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1.10 HISTORICAL BACKGROUND OF AMA BREWERIES, ENUGU.

Ama Greenfield Brewery, Enugu, built in 2003 with an estimated 220 million
Euros, equal to 30 billion naira with 30MHL capacity. Commissioned on
October 24 2003 by former President Olusegun Obasanjo, the facility described
by some as “the jewel in the crown of Heineken NV (Nigerian Breweries’ parent
company)” was until recently Africa’s biggest brewery and is reputed to be one
of the most modern breweries in the world and the first of its kind in Africa.

Nigerian Breweries has been in the Nigerian market since 1946 and it is the
Company’s sixth brewery and the second to be established in the Eastern
heartland, following Aba brewery, also owned by Nigerian Breweries. The first
brew was made on March 22, 2003 while the first bottle of Star Lager rolled off
the bottling line at exactly 12.15 p.m. on Thursday April 24, 2003.

For Ama Brewery, the past 15 years in the Nigerian market has been a success
story. The decision to establish the facility here in Enugu was a very good
business decision because it has resulted in 15 years of very strong business and
community relationships. This success story is made possible by Heineken and
the indigenous communities here in Enugu. In addition to opening up the
communities to commerce and modernization, Enugu State has also benefited
from increased revenue and the building of international confidence for
investment. This multi-billion Naira investment, as expected, has translated into
enhanced employment, as well as opening a floodgate of business activities and
opportunities in the economy.

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 CHAPTER TWO

RIEVEW OF RELATED LITERATURE

2.0 INTRODUCTION
No business organization can operate successfully in isolation without
dependence on supportive institutions, variables and factors (Oginni, 2010) i.e.
business organization exists and operates within an environment where there is
complex interplay in terms of activities as well as networks of relationship
between and among human resources, material resources and other systems. In
the views of Aborade (2005) all business decisions are found to be contingent
upon a good analysis of the environment which is often the constraints as this
environment creates the opportunities, threats and problems for the business
organization. Evolving from this, is the belief that business organization is an
integral part of its environment on the ground that they are mutually
interdependent and exclusive, where the environment plays the role of providing
the resources and opportunities to organization for its existence, and the business
organization in turn, offers its goods and services to the people living in the
environment for survival and enlightenment (Ajala 2005).

2.1 CONCEPTUAL FRAMEWORK

2.1.1 MEANING OF BUSINESS

The term business invites varied responses from different scholars. According to
Louis E. Boome and David L. Kuntz, Business is defined as all profits directed

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economic and commercial activities that provide goods and services necessary
to a nation standard of living.

In “An introduction to Contemporary Business” by William Rudelius etal;

business is defined as all profit producing activities that provide good and
service to consumer.

According to Jerry M. Rosenberg (1978) “business is defined as buying and

selling of goods and service which can be done by an individual, partnership or
organization, involving production and commerce.

According to Pita Ejiofor “Business is defined as all profit directed economic

and commercial activities that provide goods and services necessary to a
nation’s standard of living”

Considering the export definition above, we can say that, Business is a lawfully
organized activity done by the people for the satisfaction of human want and for
which money is paid. In a more general sense, business could mean a trade or
commercial activities involving buying and selling of good and services. For any
business to be successful it must provide value for its consumers, be profitable
and it must be managed efficiently.

2.1.2 CHARACTERISTICS OF BUSINESS

The activity term “Business” possesses the following characteristics

i. Production or acquisition of goods: since it is the business of “business”

to provide goods to people for a price, it is necessary that there are goods

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 to be supplied. They must therefore be either manufacture or they must be
procuring so that they can be sold and supplied.

ii. Sales or transfer of title: Goods which have been produced or procured
for sales in return for price enter the realm of business. This activity of
selling results in the production and acquisition of wealth. Goods
produced or acquired for personal consumption, however do not fall
within the scope of business.

iii. Dealing in goods and services: Business means dealing in goods and
services. They may be consumer goods such as cloths, bread, watches etc.
or producer good, such as machinery and tools. Service consists of those
items which are not stored by consumers, such as transportation,
telephone service.

iv. Regularity of dealings: Regularity and recurring nature of buying and

selling which ensures continuity of transaction are features of business.

v. Profit as a reward for service rendered: Business is an activity by

which men make their living or earn profit. Profit is the biggest stimulus
for maintaining the development. Profit is essential for survival and
development.

vi. Uncertainty or risk about future: Economic activity is an activity that

focuses on the future and one certain thing about the future is uncertainty.
The conduct of industry or business always involves an amount of risk
and uncertainty of return to the entrepreneur.

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2.1.3 0BJECTIVES OF BUSINESS

Every human activity has some objectives, and business which is of important
must have objectives. There is a common believe that money is the objectives of
business. Maximization of profit is the prevailing norm in the business. Money
chasing to them seem to be the primary economic objective of business. So, a
company must earn profit if it must continue to exist. It is necessary to make
earnings, if additional capital is to be attracted and if reserved are to be built up
for meeting risk inherent in the business activity.

Business is essentially an economic activity but it cannot be carried on in

isolation from the society. In fact, business is an activity carried out by the
people (entrepreneurs and managers), through people (employees), and for the
people (consumer and the society at large). A business enterprise may, therefore,
be viewed as an economics institution functioning in social, political and
cultural Environment. The objectives of business will have to be set in relation
to its survival and growth in the environment. It will be seen that while, on the
one hand, the environment dictates certain objective for the enterprise, and the
enterprise on the other hand also influences the environment. For example, the
environment may require that an enterprise provide employment to the people.
Having accepted this objective, the business enterprise may create product or
services for the distribution of which facilities may have to be created in the
economy. This may set new objectives for the environment including the
Government, the community and the financial institutions.

Thus, the objectives of business are determined through an interaction between

the enterprise and it activities, on one hand, and the environmental needs and the

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responses, on the other hand. Against the above backdrop, the objectives of any
business activity may be broadly categorized under the following heads:

i. Organic Objectives
ii. Economic Objective
iii. Social Objectives
iv. Human Objective
v. National Objective

2.1.3.1 ORGANIC OBJECTIVES

A business enterprise consists of people organized to conduct business activity

to meet and satisfy the need of society. It is essentially an organic entity, which
has its own infancy, childhood, adulthood and maturity in that order.

The first concerns of business enterprise are to ensure its own survival for the
Continuance of business activity. Once enterprise is assured of its survival, it
will aim growth and expansion. To achieve this, it will try to gain prestige and
win recognition from the society in which it functions. If it is unable to establish
its goodwill in the community by rendering useful service, it will still aim at
further growth and expansion. In this respect, the behavior of an enterprise is
similar to that of an individual human being.

2.1.3.2 ECONOMIC OBJECTIVES

Business activity is undertaken for earning profit. In privately owned business

enterprises, profit since business is an economic activity,mtheir primary
objectives are economic.

The main economic objectives of business may be described as follows:

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Profit: may be earning to provide means for wealth accumulation or growth and
expansion of business activity through ploughed back earning. In a state-owned
business enterprise, profit may be aimed at generating sufficient resources to
finance, expansion of the same business or other important social and economic
needs. As had been stated earlier, profit is not the sole objective of business but
it is certainly an important measure to the success of business activity.

Creation of customer: Business involves transfer, sale or exchange of good and

service to satisfy the need of customer. It follows that business can be sustained
only if there are enough people to buy the product as offered by an enterprise.
Without a body of customers, a business or enterprise may not survive.

Innovation: Business is an organ of growth, expansion and change through

innovation. Whether it is the objective of earning profit or expanding the market,
it can be achieved only by when business provides newer and better product and
service. Sometimes innovation may take the form of adaptation to a change
taking place in the society. For example, if consumers do not have enough time
for household activities like cooking, business may offer new gadgets for this
purpose and thus meet the need.

But it is also possible for business to innovate and lead the society toward
change, innovation has its part to play.

2.1.3.3 SOCIAL OBJECTIVE

Since business, operation in society cannot survive and grow unless it meets
needs of the society. Business activity has to be rooted deep in the society and
its culture. It is an important part of its objectives to fulfill its obligations to the

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society. In its turn, it is also likely to influence the needs and expectations of the
society and its culture.

Some of the important social objectives are as follow:

i. Supply of the desire quality of goods: Business thrives on the goodwill

of the community in which it is carried out. A business enterprise can
hope to have a good image only if it is alive to for producing and
supplying good and service of quality. If business fail to maintain a
continuous and sufficient supply of unadulterated goods articles of
standard quality. It will be failing fulfilling its social objectives and is
likely to incur the wrath of the society.

ii. Avoidance of profiteering and anti-social practices: While it is

legitimate for a business enterprise to work for reasonable profit, it is
necessary that it does not over-charge the customers and profiteer at their
cost. It is also a social obligation of business enterprise not to indulge in
such malpractices as hoarding, black marketing, etc.

iii. Providing Employment: One of the important objectives of business is

to create opportunities for gainful employment for the people in the
society. Sometimes this objective may conflict with the economic
objective of cutting down cost and increasing profits by introducing
automatic or semi-automatic machines. In a country like India, such
conflict may have to be in favor of employment considerations and
programmed for the introduction of automatic equipment may have to be
deferred or implemented in phases without causing loss of job to anyone.

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2.1.3.4 HUMAN OBJECTIVES

Business activity can be conducted only through the medium of human beings
working as individuals or groups in organizations. If the human factor is
overlooked by a business enterprise, it will be difficult for him to achieve any of
its other objectives. In fact, the efficiency and success of an enterprise depends
ultimately on the ability and zeal of the people working in it. For this reason,
business has to consciously seek the willing cooperation of people engaged in
different tasks. The human objective of business arises from the expectations of
the human beings performing business operations. Some of the importance
human objectives of business are:

i. Fair Deal to Employee: The first pre-requisite for getting the best out of
people is providing a fair deal to employees at different levels in the form
of fair wages and other incentives. Innovation and diffusion can only
thrive when the employees are given opportunities to develop new skills
and abilities and have a work climate in which they will grow as mature
and productive beings.

ii. Participation: A Business enterprise can get the best consideration from
its employees if they have an opportunity to participate in making such
decisions as may affect them.

iii. Job Satisfaction: A business enterprise owes to its employees the

responsibility to provide them job satisfaction by making the interesting
and challenging and by reducing the unpleasantness of work.

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In short, a business enterprise that pays sufficient attention to its human
objectives, i.e. objectives in relation to the people working in it, can hope to
benefit from their active participation in its activities.

2.1.3.5 NATIONAL OBJECTIVES

While social objectives are reflected in the general responsibility of business to

observe some moral code and serve the in various ways, national objectives are
the more specific obligations of business towards fulfillment of national needs,
aspirations and implementations of national plans and policies in accordance
with the accepted priorities. Keeping in view the national goal of establishing a
democratic socialist society and achieving growth with stability and social
justice, business should have the following major national objectives:

i. Ensuring Social Justice: It should be the objective of business to remove

inequalities of opportunities and provide a fair opportunity to all to work
and progress. In pursuit of this objective, special attention has to be paid
to neglected and weaker sections of the society.

ii. Development of Small Entrepreneurs: In keeping with the accepted

national policy, large business has the responsibility of encouraging the
growth and development of small-scale entrepreneurship by patronizing
small-scale ancillary units and by desisting from assuming monopolistic
positions.

iii. Production According to National Priorities: Business has the

objective of producing and supplying goods, which are needed in the
country for its development. Development of industries to supply inputs
for agriculture and to produce machinery and equipment required for

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 increasing production in the country are important national objectives of
businesses. It is also advisable that one of the national objectives of
business should be to manufacture and distribute cheaper varieties of
essential goods like cloth, soap, edible oils, etc. so as to help the poorer
segment of the population, particularly in less developed economies.

iv. National Self Sufficiency and Export Development: To help the

country to become self-reliant and avoid dependence on other nations,
businesses have a special responsibility to produce such articles as have
hitherto been imported. In the case of machinery, equipment and
processes, businesses should aim at import substitution as a strategy for
national self-sufficiency. It should also be the responsibility of business to
increase the international currency resource of the country by developing
export markets for goods manufactured in the country.

v. Development of Skilled Personnel: Every industry has the responsibility

for training young men as apprentices and thus contributing to skill
formation for economic growth and development.

The above are but a few of the obligations that businesses owe to the nation. The
ultimate aim of every business enterprise should be to become a useful and
effective instrument of economic growth and development and to implement
national policies in the larger interest of the nation.

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2.1.4 CLASSIFICATIONS OF BUSINESSES

There are different approaches to classification of business. These approaches

provide us with different kinds of information. The following are some of the
commonly used classifications.

i. SIZES: Here, business organizations are classified as large, medium and

small scale business. The sales volume, capital employed, profit, number
of employees, scope of operation are some of the indices used to measure
on organization’s size.

ii. FUNCTION: A business may perform at least one of the following

functions;

Primary Functions: -Provision of raw materials

Secondary Function: -Converting of raw material to finished goods.

Marketing Function: -Getting the product into the hand of potential

customers.

Tertiary Functions: -Providing services.

iii. TYPES OF GOODS: i.e. durable/non-durable goods and standard/non-

standard goods.

iv. TYPES OF CUSTOMERS: i.e. household, industrial users and

government agencies.

v. DEGREES OF MECHANIZATION AND AUTOMATION: i.e.

whether a business is capital or labor intensive.

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vi. TYPES OF INDUSTRY: i.e. manufacturing, services, banking,
conglomerate.

vii. OWNERSHIP STRUCTURE: sole proprietorship, partnership,

corporation and cooperatives.

2.1.5 STRUCTURES OF BUSINESS OWNERSHIP

The business environment in which the manager has little control can either be
favorable or hostile to business growth, however, the success or failure of any
business largely depends on the way in which the business is setup. The variety
of forms of business organization available today reflects the complexity of
business activities in the modern.

Generally, business ownership can be structured into two categories the

unincorporated business that do not require the government charter, i.e. they do
not need special government permit to commence operation, sole proprietorship
and partnership are unincorporated. The incorporated business concerns. Such as
cooperatives and corporation cannot exist until they are authorized by a
government agency.

2.1.6 COMPONENT OF BUSINESS

The two basic form of business are

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i. UNINCORPORATED BUSINESS ORGANIZATION: -This type of
business does not involve complete legal procedures to be fulfilled before
the business is set up. These are: -

 Sole proprietorship

 Partnership

 Joint ventures

ii. INCORPORATED BUSINESS ORGANIZATION: -These business

organizations are established in keeping with specific or general acts of the
assembly. These are

 Corporate

 Companies

 Parastatals and public utilities

 Co-operative societies.

2.1.6.1 UNINCORPORATED BUSINESS ORGANIZATION

i. SOLE PROPRIETORSHIP

This is the business owned and operated by one person. It is the oldest form of
business organization and also the commonest of all. It is a business owned by
one individual who has exclusive control over it, although he may hire a
specialist, however, the overall control is vested in the sole proprietor.

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ADVANTAGE OF SOLE PROPIETORSHIP

 There is quick decision making process

 The owner receive all the profit realized

 There is independence in business control

 A small capital is required to start the business

 Customers receive personal attention

 Minimum legal restriction

 Maximum incentive to succeed

 Ease of dissolution

 Flexibility of operation

 Business income and proprietor’s income are taxed as one

DISADVANTAGES OF SOLE PROPIETORSHIP

 Unlimited risk of the entrepreneur

 Lack of capital prevent expansion

 The death of the owner may end the business

 He has no access or financial resources as a result of poor collateral

security

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  It lacks legal entity i.e. he cannot sue and sued

 The scope of initiative and knowledge of the owner is limited

 Difficult in attracting qualified labor.

ii. PARTNERSHIP

It is the association of two or more individuals operating a business to make

profit. At least two people with 20 as maximum, for non-banking business and
10 in the case of banking functions.

ADVANTAGES OF PARTNERSHIP

There is better decision-making process as two people are able to pool their
resources together.

 It enjoys a high degree of continuity

 Partnership enjoys privacy of its account

 There is higher availability of capacity

 Limited legal restriction

 Freedom from double taxation

DISADEVANTAGES OF PARTNERSHIP
 The liability of member is unlimited
 It has no legal entity

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  There is slow decision making process as there may be need to consult
with any partner
 There is tendency for disagreement between co-owners which might lead
to the end of the business
 Restrictions on transfer of ownership

iii. JOINT VENTURE

These are business organization formed for the sole purpose of carrying out
specific assignment which features as partnership. To embark on joint ventures,
enter into an agreement specifying the nature of the business for which the joint
venture is being formed. The agreement includes: the right and responsibility of
the respective organizational owners and procedures for the dissolution of the
joint venture on or before the completion of the venture. They can raise capital
from various members or individual each of whom gets a share in the venture.

2.1.6.2 INCORPORATED BUSINESS ORGANIZATION

i. CORPORATION

The corporation form of business ownership came into existence due to the
inability unincorporated organizations, such as sole proprietorship and
partnership to raise the required funds for investments as demanded by the
dynamic technological environment.

The corporate form of ownership was strengthened in 1819, when chief justice
John Marshal of the US supreme court defined a corporation as “an artificial

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being, invisible, intangible and existing only in contemplation of law’’ Being the
mere creature of law it possesses only properties which the charter of its creation
confers upon it, either expressly or incidentally to its very existence.

This definition emphasis that corporation is legal entity endowed with right
duties and power of a person by law. It may sue and be sued.

A corporation depends on individuals for its existence. People bring corporation

into existence by pooling resources together and ensuring its continued survival.

Primarily, three groups determine the corporation’s course. The shareholders,

the board of directors and officers of the corporation.

ii. COOPERATIVE

The term “cooperative” has been defined by different perspectives by scholars.

According to the Advanced Learners Dictionary a cooperative is defined as
“The spirit of working together or acting together for a common purpose”

According to Ejiofor (1989) a cooperative is an association of persons, faced by

the same economic problems, who voluntarily pool their resources on the basis
of equality through joint effort and mutual participation to remedy their plight.

Having examined all the definition above, we can have a working definition of
cooperative society as “a form of business organization established by unlimited
number of person who voluntarily associate themselves together on the basis of
equality voting right, for a common purpose based on some international
accepted principles.

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2.1.7 THE ENVIRONMENT OF BUSINESS

Philip Kotler defined environment as “the totality of forces and entities that are
external or potential totally relevant to the particular agent or matter”. He also
defined business environment as “an environment which consists of the actors
and forces external to the business management with the ability to develop and
maintain successful transactions with its target customers”.

Olukunle Iyanda (1995) also defines: “Business environment as a product of the

environment in which a business operates as an institution, whose entire
existence depend on how well it integrates onto the society. The characteristics
of businesses enumerated before must represent measure of meeting the
conditions in the environment.

Business environment is thus the sum of all interrelationships within the

business and between the business and the society. In management, the word
“environment” does not necessarily mean physical surroundings, but is used to
describe all those influences that bear upon the individual organizations.

Business environment ordinarily means the area of operation of the business. It

constitutes the element with which the business operates which interrelates in
our society. These elements could be internal and external environment.

A. THE INTERNAL ENVIRONMENT: This means employees, money,

materials, management, shareholders etc. all within the reach of the business.

B. THE EXTERNAL ENVIRONMENT: These are the factors which are not
within the reach of the business although they have influence on the smooth
operation of the business one or the other.

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2.1.7.1 INTERNAL ENVIRONMENT

This is also known as the controllable environment. Here the company has little
power, over it as they within its reach. According to Olakunle Iyanda (1995), the
early environment in which business operate consist of its investors, customers,
employees etc. Today, business operates in a complex environment.

Every organization is established in order to achieve certain objectives however

this depends on the type of organization. For an organization to be in existence,
certain factors of production must be combined.

The money for instance, acquires the materials which are being used by men, the
management co-ordinates the efforts of the men to produce the company’s
products and service. The board of directors (policy maker) set objectives which
the management executes by exercising necessary control. The workers form the
labor union and the shareholders protect the interest of their respective members.
However, as a result of science and technology business become proliferate and
the use of a complex environment becomes imperative

2.1.7.2 THE EXTERNAL ENVIRONMENT

These are the factors which are within the reach of the business, although they
have influence on the smooth operation of the business one way or the order.
Among these factors are

1. The Competitive Environment

2. The Economic Environment
3. The Technological Environment
4. The Political Environment
5. The Legal Environment
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6. The Cultural and Social Environment

i. COMPETITIVE ENVIRONMENT

The interactive processes that occur in the market place as competing

organizations seek to satisfy market is known as competitive environment. This
is also known as the films relative situation in the market. It includes such
factors as how the film rate in market share, technological innovation, financial
strength, involvement in growth industries and the development of human
resources. Our earlier discussion indicated that the competitive environment
sometimes plays a major role in the development of the internal environment.

ii. ECONOMIC ENVIRONMENT

Economic condition affects the management with respect to the nature of

economic system prevailing in the general state of the economic itself, and the
nature of the business enterprises system will depend on whether the economy is
capitalist socialist and otherwise. In addition, the economic dimension is a
dynamics aspect of the environment during prosperity, the business expands
future event can have a profound influence on managerial decision-making. Tax
reforms and federal deficit can illustrate the point. Decisions during economic
boom will definitely oppose that in an economic recession period. This will
depend on the nation’s physical and monetary policies.

iii. TECHNOLOGICAL ENVIRONMENT

The availability or state of technology for an industry may set parameters on the
management’s decision-making. Technology refers to the process of putting
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knowledge to work for humanity. Much information becoming a part of human
knowledge can be applied to the organization to obtain solution.

iv. CULTURAL AND SOCIAL ENVIRONMENT

This deals with relationship with the society and its culture. Obviously, there are
many different fact of significance. One important category is the general
readiness of society to accept marketable ideas. Another important category is
that the trust and confidence has been on the decline since the mid-1960s.

The social environment made up of the attitude, desire expectation of

intelligence and education beliefs and custom of people in a given society.
Culture on the other hand, include building, arts, tools and other physical things
as well as techniques. Social institutions, customs or traditions, attitudes, beliefs
and value systems known to the group.

2.1.8 CLASSIFICATION OF BUSINESS ENVIRONMENT

There is no universal classification that provides all dimension covered by

business environment. The following are some of the commonly used
classifications: -

i CLASSIFICATION BASED ON THE RATE OF CHANGE: A business

environment can be classified by determining the extent to which the
environmental factor changes. Environmental influences may be stable, dynamic
(i.e. change at a predictable rate) or turbulent (i.e. change at predictable rate).
Forecasting environmental factors in a static and a turbulent environment may

27
be useless considering the fact that environmental factors do not change in the
former, while forecasting in the latter is unattainable

ii. CLASSIFICATION ON EXTENT OF CONTROL: In this classification,

the environmental forces may be controllable, i.e. managers can use their
managerial skills and experience to change these environmental forces. On the
other hands, the forces may be uncontrollable i.e. they are beyond the ability of
individual manager and manager must consider the environment given and adapt
their management practices to suit the environment.

In general, the environmental forces are usually classified into two main
categories namely: internal and external environment.

2.1.9 CONTROLLABLE AND UNCONTROLLABLE ENVIRONMENT

A. CONTROLLABLE ENVIRONMENT (MICRO)

This is the environment that management can influence. This environment can
be manipulated by management and it is otherwise known as Micro-
environment. There are: -

i. Task Environment
ii. The Competitive Environment
iii. The Public Environment

i. TASK ENVIRONMENT: - This is the immediate environment of the

company’s total environment. It consists of the instructions that help the
organization to carry out its major task. They co-operate to raise form of

28
marketing value. They include such institutions as: - company’s supplies
customer, marketing intermediaries and facilitators (e.g. wholesalers, retailers,
jobbers, agents’ factors etc.)

ii. COMPETITIVE ENVIRONMENT: This consists of instructions that can

complete with the firm for buyers as well as for scarce resources. They are the
enterprises or organization that produce identical or similar product.

iii. THE PUBLIC ENVIRONMENT: This refers to the group that has interest
in an organization to achieve its goal depending on whether the public’s attitude
to the firm’s activities is favorable or not. This makes it important for the
organization to recognize and put the public into enviable posit ion. The public
consist of the media, citizen action government and financial pubic.

B. THE UNCONTROLLABLE ENVIRONMENT (MACRO)

The uncontrollable environment is otherwise known as macro environment. It is

consisting of forces that the organization cannot control, influence or manipulate
the pose as threats to the effective performance of the organization’s activities
and hence of effective achievement of its goal. There is therefore necessity to
acknowledge and adapt to them since they cannot be controlled. The major
components of the marketing macro environment are as follows:

I. Demography

ii. Nature forces, etc.

1. DEMOGRAPHY: This refers to the forces of population growth, birth rate,

age distribution, sex distribution and education distribution that make up market.
For example, the organization may not be able to cope with explosive

29
population growth because that would mean explosive customer in customer
needs too. A decline birth rate will lead to a decline in demand for the product of
the organization etc.

2. NATURAL OR PHYSICAL FORCES: This nature or physical forces are

the handwork of nature i.e. God no man can influence it either to make or add to
it and so it is beyond the control of man. They are; drought, flood, earthquake all
limit the supply of raw materials.

3. THE EXTERNAL ENVIRONMENT: These consist of competitive, legal,

politics, Social, cultural and economic environment that was discussed before.

2.1.10 THE ROLE OF ENVIRONMENT ON LOCATION OF

INDUSTRIES

Environment plays a very vital role on the location of an industry. The owner of
the business has an ultimate aim of maximizing profit; therefore, he has to study
culture of the country to be served. Business should recognize the way of life of
the life of the people and then be establish in the area where the business will
direct its available resources towards the culture needs of the people.

Also business should be located where the business will train and expose all
business executives; superior to the scientific use of machines, Seminary,
workshop, conferences should be made available for them in such areas.

In location of business the owner should establish according to the law and
regulation of the government. Business must also be aware that government can
interfere with the affair of the organization.

30
Finally, business should prevent running into financial mess by locating near to
source of loan internally, generated revenue over draft from banks and cost
saving devices. If they are taken into consideration the company will have rapid
development.

2.1.11 DIFFERENCES BETWEEN THE LOCATION AND

LOCALIZATION OF INDUSTRY

One of the basic decisions to be made during the planning stages of a business
concern is to decide where a particular industry should be sited. Location of
industry is the sitting of industry in a particular area while localization of
industry is the concentration of industries in one locality. Very often the
locations of an industry in one place most often attract other industries to the
area; which may lead to the formation of an industrial avenue.

2.1.12 REASON FOR LOCATING AND LOCALIZING INDUSTRY

a. Availability of transport and its cost: There must be a good transport for the
raw materials and finished products to enable the organization reduce cost
of production. Transport must also be available for the workers.

b. The nature of raw materials: The industry must be located near the source
of raw material to reduce cost e.g. cement factories are located near
limestone deposits e.g. in Nkalagu, Ewekoro.

c. Factor Endowment: This has to do with the endowment of nature e.g.

coalmining is cited where is availability of coal.
31
d. Nearness to power and labor supply: Some industries have to be close to the
source of power. Industries like Iron and Steel that use coal as a source of
energy are usually located near coal mines. There must also be readily
available supply of manpower to take charge of different position in the
industry.

e. Proximity to Financial Institution: Industries tend to be located near

financial institutions so that they can have access to credit facilities such as
loan, etc.

f. Government policy: before a company is located, the company should

know the government policies, rule and regulation guiding the location and
operation of such an industry.

g. Nearness to the market: The size of the market limits the size of the market
of production. An industry should be located near a commercial center
where these will be buoyancy in the sale volume.

h. Political stability: if the country is economically or politically unstable, it

tends to chase foreign firm away.

I. Climate: farming as an industry tends to depend on good climate and soil

conditions.

J. The location of other firms: the location of other firms may attract a new
one that is being established. New firms may locate near others in order to
take advantage of their existence.

32
2.1.13 REASONS FOR LOCALISATION OF INDUSTRIES

1. The localization of industries may be the result of historical development of

industry. Consequently, manpower and all the infrastructural facilities
qualify it more than any other place for the citing of industries.

2. Industries may also be cited in certain area because of the relationship of

their services. Such a relationship may be that the input of one industry is
the output of another in this case it is advantageous that they are located
near one another e.g. a glass industry and a carton industry may be located
near a brewery because the brewery will use them for packaging.

3. The concentration of industries in one place may be as a result of

government’s policy. Some industries may therefore be concentrated to
give greater employment opportunities for the in that area which is a means
of improving their economic life.

2.2 THEORITICAL FRAMEWORK

2.2.1 CAPITALIST THEORY

In Adam Smith’s capitalist mode of production, it refers to the systems of

organizing production and distribution within capitalist societies. Private
money-making in various forms (renting, banking, merchant trade, production
for profit and so on) preceded the development of the capitalist mode of
production as such. The capitalist mode of production proper, based on wage-
labor and private ownership of the means of production and on industrial

33
technology, began to grow rapidly in Western Europe from the Industrial
Revolution, later extending to most of the world.

The capitalist mode of production is characterized by private ownership of

the means of production, extraction of surplus value by the owning class for the
purpose of capital accumulation, wage-based labor and at least as far
as commodities are concerned being market-based.

2.2.2 SOCIALIST THEORY

In Marxist theory, socialism (also called the socialist mode of production)

refers to a specific historical phase of economic development and its
corresponding set of social relations that supersede capitalism in the schema
of historical materialism. The Marxist definition of socialism is a mode of
production where the sole criterion for production is use-value and therefore
the law of value no longer directs economic activity. Socialism is a range of
economic and social systems characterized by social ownership and democratic
control of the means of production as well as the political theories and
movements associated with them.

2.2.3 MIXED ECONOMY THEORY

A mixed economy is an economic system blending elements of market

economies with elements of planned economies, free markets with state
interventionism, or private enterprise with public enterprise. There is not only
one definition of a mixed economy, but there are two major definitions
recognized for "mixed economy". The first of these definitions refers to a

34
mixture of markets with state interventionism, referring to capitalist market
economies with strong regulatory oversight, interventionist policies and
governmental provision of public services. The second definition is apolitical in
nature and strictly refers to an economy containing a mixture of private
enterprise with public enterprise.

2.3.4 WEBER’S THEORY OF LOCATION OF INDUSTRIES

This theory is based on the ‘least cost principle’ which is used to account for
location of a manufacturing industry. The theory is based upon a single, isolated
country with homogeneous conditions. Some of the natural resources in this
setting are found everywhere, while some have fixed locations. The workforce
has fixed locations. Transportation costs, in this situation, are a function of cargo
weight and the distance. Demand is uniform throughout for all products, hence,
there is uniform price for all products at all locations.

The theory claims that the costs will get influenced by transportation costs, labor
costs and by the agglomeration factor.

2.4 EMPERICAL REVIEW

This section involves empirical studies relating to the topic of this project, which
will help shed more light

Adu Emmanuel (2016). The impact of business environment factors on

performance of small & medium sized enterprises in industry in Kumasi”. The
research study seeks to examine the impact of external business environment
35
factors on performance of Small & Medium Sized Enterprises in industry in
Kumasi Metropolis. The aim of the research is to examine the impact of macro-
environment factors, industry forces and competitors and market business
environment forces on performance of SMEs in Kumasi Metropolis. Literatures
were reviewed theoretically and empirically. Data collected were analyzed with
the help of Statistical Package for Social Scientists (SPSS). The survey
conducted on a total of 240 respondents out of which 220 responses were
received representing 91.67% response rate. The Cronbach Alpha was adapted
to measure reliability of data. The results have proved that there is a positive
relationship between macro-environment factors (specifically political,
economic, technological and legal factors).Also, the results showed a positive
relationship between industry forces (threat of entry, power of buyers, power of
suppliers, threat of substitutes and competitive rivalry) on performance. In
addition, the research results show that there is a moderate relationship between
competitive and market environment factors (strategic group, market segment &
strategic customers) on dependent variable (performance). The study will serve
as information cause that will promote and orient industries towards a
competitive advantage. He also recommended to other researchers that a further
study can be conducted on the internal business environment impact on
performance of business location. Also, a similar study can be conducted on the
external business environment impact on performance of local manufacturers in
Ghana.

“Impact of business environment on organization performance in Nigeria. A

case study of Union bank of Nigeria” by Gloria Obiageli Eruemegbe (2015).
The study seeks to unravel the factors that affect construction workers’
motivation and the corresponding effect of the identified motivational factors on
36
workers’ performance and overall productivity. To answer research question and
test formulated hypotheses, the study relied on questionnaire to generate
relevant data out of 39 questionnaires administered on officers in Union Bank of
Nigeria, Lagos, only 20 were properly completed and returned. This gave an
effective response rate of 51%. The survey revealed that, among the top ten
critical factors (i.e. teamwork, work based on contract, supervision based on
leadership by example and provision of equipment) had great effect on
motivation as well as impact on productivity. More so communication, love and
belongingness, opportunity to undertake challenging task, identification with
goal and overtime were among the critical factors.

Business Environmental Factors: Implications on the Survival and Growth of

Business Organizations in the Manufacturing Sector of Lagos Metropolis”.
(Babalola Oluwayemi Oginni & Abel Segun Adesanya, 2013). The research
work focused on the implication of the business environmental factors on the
survival and growth of business organizations in the manufacturing sector with
reference to Lagos metropolis of Nigeria. The study identified some
environmental factors that were peculiar to the business organizations in the
manufacturing sector vis-a-vis their significant impact through the administered
questionnaires to employees of selected business organizations and inhabitants
of three senatorial district that constitute Lagos metropolis. Electricity,
government policies and fraudulent practices were found as factors critical with
severe impact on the survival and growth of business organizations in the
manufacturing sector among other factors which was adduced as the underlying
rationale behind exodus of manufacturing organizations to the neighboring
countries. The use of Z value of 1.96 at 0.05 level of significance further
37
confirmed the impact of each of the environmental factors on the survival and
growth of business organizations and concluded that these factors signified
impending danger that may impede the survival of these business organizations
and make growth an impossible task if left on, thus recommended among others
that the present arrangement (policy) of centralizing electricity which has made
the federal government to enjoy monopoly should be jettisoned in order to make
way for devolution and alternative to power generation aside the use of
generator which has made operation cost to keep increasing.

2.5 SUMMARY OF RELATED LITERSTURE

This project research analyzed the literature review relating to this topic, looking
into the conceptual framework of the study; defined business and environment
as well as being defined by various authors, looking into business environments
and environmental factors and how they affect business citing and location. The
theoretical frameworks are from theories based on business activities in different
economic class. This study also explored the empirical studies of other
researchers and scholars; it examined data, interviews, etc. carried out by
various individual(s). These studies showed the various ways how organizations
and businesses relate with their environments.

38
 REFRENCES

Aborade R. (2005), a Practical Approach to Advance Financial Accounting.

Adeleke Adepoju. (2003). Business Policy and Strategy, 2nd edition
Ajala, V.O. (2005). Public Relations: in search of professional Excellence,
Akanni J.A. (1987), Management concept techniques and case, 1st edition.
Azhar, .K. (2008). Strategic Management and Business Policy.
Dictionary of Business & Management. (1978), Jerry M. Rosenberg
Ejiofor P. N. (1989), Foundation of Business Administration, Onitsha: African
Publishers Ltd.
Etuk E.J. (1985), The Nigeria Business environment Macmillan.
Lawal A.A. (1993), Management in focus
Oginni, B.O. (2010), Business Organic Management.
Oginni, B.O. (2012). The turbulent Business Environment in Nigeria.
Paul Hastings (1968), Introduction to business New York Mc. Grow hill book
Company
William Rudelius, W. Bruce Erickson, William J (1981), An introduction to
contemporary business.

39
 CHAPTER THREE
METHODOLOGY

3.1 INTRODUCTION

This chapter describes various techniques employed in conducting the research

on the topic “EFFECT OF ENVIRONMENTAL FACTORS ON LOCATION
OF BUSINESS” using the case study of Ama Breweries, Enugu.

3.2 RESEARCH DESIGN

The descriptive approach will be adopted for this study, which consists of
survey and field study. This research method is very necessary when the
population to be studied is very large.

3.3 AREA OF STUDY

The area of study used in this research is Ama breweries, Enugu state.

3.4 SOURCE OF DATA

In this research, both primary and secondary data collection techniques were
employed. The primary data methods included questionnaires, so as to get
personal opinions from them, while secondary data collection methods included
the review of relevant journals and textbooks.

40
3.5 POPULATION OF THE STUDY

The population of the study comprised of the junior and senior staff of Ama
breweries, Enugu. Which makes a total of 540 staff.

3.6 DETERMINATION OF SAMPLE SIZE

The sample of this research is calculated by using Taro Yamane (Yamane, 1973)
formula with 95% confidence level. (according 20,693,000 persons from the
data of Beijing China district official report 2012.) The calculation formula of
Taro Yamane is presented as follows.

n = ------------
N _
1 + N(e)2

Where ：

n= sample size required

N = population = 540

e = margin of error = (0.05)

Substitute numbers in formula:

n= 540
------------
1 + 540 (0.05)2

41
n= 540
------------
1 + 540 (0.0025)

n= 540
------------
2.35

n= 229.78723

After calculated the sample size by substituting the numbers into the Yamane
formula, the numbers of sample is 229.78723 persons. In order to obtain reliable
of data, researcher has increased sample size to 230 persons.

3.7 DESCRIPTION OF RESEARCH INSTRUMENT,

ADMINISTRATION AND COLLECTION

230 copies of questionnaires were distributed amongst the staff of Ama

breweries, Enugu. The questionnaire type distributed was multiple choices. The
instruments were shared amongst staff by the management, and 179 copies (78%)
were returned back to the management. The other copies could not be retrieved
due to claims of missing questionnaires by the staff.

42
3.8 VALIDATION OF RESEARCH INSTRUMENT

The researcher designed the questionnaire and the student’s supervisor validated
it. The questionnaire was returned for confirmation to ensure that observations
were precise.

3.9 RELIABILITY OF RESEARCH INSTRUMENT

There was a need to detect omission and inadequate entries. This was carried out
by making use of sampling inspection. A 100% sampling inspection was carried
out. All the 179 returned copies of questionnaire were thoroughly scrutinized
and edited to prevent the tabulation and incorporation of irrelevant and incorrect
information.

Consequently, all were found to be good and useful after adequately analyses
and thorough scrutiny.

3.10 METHOD OF DATA ANALYSES

Chi-square statistical tool was used to analyze data retrieved. Frequency tables
and percentages were also used to for the proper analysis and clear interpretation
of data from samples studied and answers gotten from questionnaires shared.

3.11 DECISION RULE

Reject the null hypothesis if the calculated value is greater than the table value.

43
 REFRENCES

Willy Nnamani, (2003). The Research Process, Owulu publishing company,

independence layout, Enugu, Enugu state, nigeria
Osuka E.C., (1982) Introduction to Research Methodology, African-FEP
Publishers Ltd, Onitsha.
Saunders M.P. luis et all, (2007). Research methods for business students.

44
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSES

4.1 INTRODUCTION

In carrying out the research, 230 copies of questionnaire were distributed to the
respondent, but only 179 were received. They formed the yardstick for the data
analysis. In this chapter, all the data generated were presented and analyzed

4.2 PRESENTATION AND ANALYSES OF DATA

4.2.1 PRESENTATION AND ANALYSES OF DATA ACCORDING TO

FIELD SURVEY.

TABLE 4.1: Determination of response

VARIABLE EXPECTED ACTUAL PERCENTAGE

RESPONSE RESPONSE (%)
Senior Staff of Ama 63 49 21.3
breweries
Junior Staff of Ama 167 130 56.5
breweries
TOTAL 230 179 77.8
Source: Field Survey, 2018

Table 4.1 indicates that the percentage of overall respond was 77.8%. This
shows that respondents turned up impressively.
45
TABLE 4.2: Respondents by Gender

GENDER Frequency Percentage (%)

MALE 112 62.6
FEMALE 67 37.4
TOTAL 179 100
Source: Field Survey, 2018

Table 4.2 shows that the percentage of higher respondents 112 (62.6%) were
male while 67 (37.4%) were females, showing males will have more
representation than females in the research study.

TABLE 4.3: Age Distribution

AGE Frequency Percentage (%)

18-30 92 51.4
31-40 56 31.3
41 and above 31 17.3
TOTAL 179 100
Source: Field Survey, 2018

Table 4.3 Indicates that the highest respondents 92 (51.4%) were in the age
range of 18 - 30, followed by the age range of 31- 40 having a frequency of 56
(31.3%).The age range from 40 years and above 31 (17.3%) are the minor
respondents in the age distribution.

46
TABLE 4.4: Education Qualification

GENDER Frequency Percentage (%)

OND 27 15.0
HND 49 27.3
BSC 57 31.8
MBA/M.SC 31 17.3
Ph.D. 15 8.4
TOTAL 179 100
Source: Field Survey, 2018

Table 4.4 shows that the major respondents 57 (31.99%) were B.sc holders,
while 49 (28.76%) were HND holders, OND holders shows 27 (17.74), while
MBA and M.Sc. holders with 31 (14.25) and the least respondents were Ph.D.
holders with 15 (7.26) representation from the above analysis.

4.3 PRESENTATION AND ANALYSES OF DATA ACCORDING TO

RESPONSE TO QUESTIONS IN THE QUESTIONNAIRES SHARED.

QUESTION 1: Does the religion of the people around has a negative impact
on the product patronage?
TABLE 4.5: Negative impact on product patronage due to reliegion of the
people
VARIABLE RESPONSE PERCENTAGE (%)
YES 52 29
NO 104 58.1

47
NO ANSWER 23 12.9
TOTAL 179 100
Source: Field Survey

From table 4.5, respondents were asked if religion of the people around has a
negative impact on the product patronage of Ama breweries. The result above
shows that 104 disagreed while 52 agreed and 23 were undecided.

QUESTION 2: Is there any change in the state of equipment used?

TABLE 4.6
VARIABLE RESPONSE PERCENTAGE (%)
YES 101 56.4
NO 64 35.8
NO ANSWER 14 7.8
TOTAL 179 100
Source: Field Survey, 2018

From table 4.6, 101 (56.4%) respondents gave their answer as yes, while 64
(35.8%) gave their answer as no. The remaining 14 (7.8%) respondents were
undecided.

QUESTION 3: Does the system of education affect the supply of labor?

TABLE 4.7: Supply of labor
VARIABLE RESPONSE PERCENTAGE (%)
YES 66 36.9
NO 91 50.8

48
NO ANSWER 22 12.3
TOTAL 179 100
Source: Field Survey, 2018

From table 4.7, 66 (36.9%) respondents agreed that the system of education
affects the supply of labor, while 91 (50.8%) respondents did not agree and 22
(12.3%) did not give an answer.

QUESTION 4: Does the technological level of this country affect your

production level?
TABLE 4.8: Level of production
VARIABLE RESPONSE PERCENTAGE (%)
YES 104 58.1
NO 52 29
NO ANSWER 23 12.9
TOTAL 179 100
Source: Field Survey, 2018

From table 4.8, 104 (58.1%) respondents agreed that the technological level of
this country affects the production level, while 52 (29%) respondents did not
agree and 23 (12.9%) did not give an answer.

QUESTION 5: Do you think the relationship between the trade union and
management of this company is cordial?

TABLE 4.9: cordial relationship between trade union and management

49
VARIABLE RESPONSE PERCENTAGE (%)
YES 122 68.2
NO 41 22.9
NO ANSWER 16 8.9
TOTAL 179 100
Source: Field Survey, 2018

From table 4.9, it could be accepted that the relationship between the trade union
and the management is cordial. This is because 122 (68.2%) respondents gave
their answer as yes, 41 (22.9%) gave their answer as no, while 16 (8.9%)
indicated no answer.

QUESTION 6: Does the type of business pursued by the organization have

a negative effect on the environment.

TABLE 4.10: The effects of environment on the business pursued by the

organization

VARIABLE RESPONSE PERCENTAGE (%)

YES 69 38.6
NO 89 49.7
NO ANSWER 21 11.7
TOTAL 179 100
Source: Field Survey, 2018

From table 4.10 above, 69 (38.6%) and 89 (49.7%) gave their answer as yes and
no respectively, while 21 (11.7%) were undecided.

50
QUESTION 7: Is there any change on your production method?

TABLE 4.11: Change in production method

VARIABLE RESPONSE PERCENTAGE (%)

YES 98 54.7
NO 37 20.7
NO ANSWER 44 24.6
TOTAL 179 100
Source: Field Survey, 2018

From table 4.11 above, it can be concluded that there is a change in production
method. This is because 98 (54.7%) agreed and 37 (20.7%) gave their answer as
no, while 44 (24.6%) were undecided.

QUESTION 8: Does this company render after sales services to its

customers?
TABLE 4.12: After sales services to customers.
VARIABLE RESPONSE PERCENTAGE (%)
YES 62 34.6
NO 89 49.7
NO ANSWER 28 15.6
TOTAL 179 100
Source: Field Survey, 2018

From table 4.12 above, there is proof to show that the company renders after
sales services. This is because 62 (34.6%) were undecided while 89 (49.7%)
gave their answer as no, and 28 (15.6%) were said yes.

51
QUESTION 9: Does the company provide a means to communicate with
the society through various social mediums

TABLE 4.13: Location of customers

VARIABLE RESPONSE PERCENTAGE (%)
YES 95 53.1
NO 33 18.4
NO ANSWER 51 28.5
TOTAL 179 100
Source: Field Survey, 2018

Table 4.13 above, shows that majority of the customers are located within the
country. This is because 95 (53.1%) agreed and 33 (18.4%) gave their answer as
no, while 51 (28.5%) were undecided.

QUESTION 10: Does the company charge extra fees for the after sales
services rendered to its customers?
TABLE 4.14: Extra fees charges for after sales services
VARIABLE RESPONSE PERCENTAGE (%)
YES 64 35.8
NO 94 52.5
NO ANSWER 21 11.7
TOTAL 179 68.887
Source: Field Survey, 2018

52
Table 4.14 shows that the company does not charge extra fees for after sales
services. This is evidenced by 64 (35.8%) respondents who indicated No, 94
(52.5%) indicated Yes, while 21 (11.70%) where undecided.

4.4 TEST OF HYPOTHESIS

Testing the research hypothesis which are represented by H0 and H1 using the
Chi-square formula, which is given below as

Σ (Oi) – (Ei)
Ei

Where

Oi = Observation frequency

Ei = Expected frequency

Σ = Summation

Fe = Total frequency
No of rows in table

Fe = 179
3

Fe = 60

Level of significance = 0.05 (5%)

Degree of freedom = (DF) = (R-1) (C-1)

DF = (3-1) (2-1)

53
DF = (2) (1)

DF = 2

At the level of significance (95% confidence level) 0.05, the degree of freedom
is 2 = 5.99

HYPOTHESIS I
H0: Business environment creates problems for the organization.

H1: Business environment does creates problems for the organization.

TABLE 4.15
Response Observation Expected Fo - Fe (Fo – Fe)2 (Fo – Fe)2
Frequency Frequency Fe
(Fo) (Fe)
Yes 52 60 -8 64 1.1
No 104 60 44 1963 32.7
Not sure 23 60 -37 1369 22.8
Total 179 56.6
Source: Field Survey, 2018

Result

The calculated value of X2 (56.6) is greater than the level of significance, which
shows 5.99, we can reject the null hypothesis and accept the alternatives, which
states that Business environment does, creates problems for the organization.

54
HYPOTHESIS II
H0: The problems affecting business location cannot be tackled.

H1: The problems affecting business location can be tackled.

TABLE 4.15
Response Observation Expected Fo - Fe (Fo – Fe)2 (Fo – Fe)2
Frequency Frequency Fe
(Fo) (Fe)
Yes 122 60 62 3844 64.1
No 41 60 -19 361 6.0
Not sure 16 60 -44 1936 32.3
Total 179 102.4
Source: Field Survey, 2018

Result
The calculated value of 102.4 is greater than the level of significance, which
shows 5.99, we can reject the null hypothesis and accept the alternatives, which
states that the problems affecting business location can be tackled.

HYPOTHESIS III

H0: There are no measures to take to avoid future problems.

H1: There are measures to take to avoid future problems.

TABLE 4.15
Response Observation Expected Fo - Fe (Fo – Fe)2 (Fo – Fe)2
Frequency Frequency Fe
(Fo) (Fe)
Yes 95 60 35 1225 20.4

55
No 33 60 -27 729 12.2
Not sure 51 60 -9 81 1.4
Total 179 34
Source: Field Survey, 2018

Result
The calculated value of 34 is greater than the level of significance, which shows
5.99, we can reject the null hypothesis and accept the alternatives, which states
that there are measures to take to avoid future problems.

4.5 DISCUSSION OF FINDINGS

From the above hypotheses test carried out, using the Chi-square statistical tool,
at 95% level of confidence, the null Hypotheses H0 were all rejected while the
alternate hypothesis H1 were all accepted. The business environment affects the
location of business but not in an adverse level according to the study of Ama
brewery, Enugu state.

In additions to the findings, it shows the level in which environment affects

business location in as much as it does not pose much of a threat to the
organization’s productivity.

Various methods can be adopted to help reduce the level of problems created in
an organization by its environment. Including both the internal and external
environment of the Organization.

56
 CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND

RECOMMENDATIONS

5.1.1 SUMMARY OF FINDINGS

From the analysis done in chapter four, the following findings were found;

1. The business environment creates a number of problems on business

location, ranging from Culture and norms of the society, to Government
policies relating to economics activities, to internal forces exacting from
shareholders and members of the organization.

2. It was also found that the relationship between the organization and their
customers could affect the level of productivity of the organization.

3. The relationship between business and its environment is mutual, that is,
the environment exerts pressure on business, while business, in turn
influences various aspects of its environment. This is because it depends
on its environment for the supply of all its inputs and at the same time to
absorb its output.

5.2 CONCLUSIONS

This study focus on the impact of business environment on organizational

performance, it is important for the management to check the relationship

57
between the workers; employees and their customers. In the absences of good
infrastructures, the productivity level could be affected and it may also hinder
the performance of the workers. However, it is necessary to consider the effect
of the research on Ama breweries, Enugu as the sample or case study.
Environmental factors, which are the basic problems which business faces,
should be well tackled. It will help to build the relationship between the
management, workers and customers.

5.3 RECOMMENDATION

The researcher therefore recommends the following measures for the

management of the organization so that the corporate objectives can be fully
accomplished.

1. Business organization should make use of internal and external

environment in an effective way in order to achieve their preconceived goal.
This can be done by introducing modern technology which should be
accompanied by a corresponding backup training on the equipment to ease
clarity, effectiveness, time saving, reduction in repair of factory plan and
machinery will boost the productivity and reduce the inconvenience faced
employee and people residing in the area where the company is operating.

2. More so, the organization must make sure he satisfies the people living in
the area where there operate by minimizing pollution of environment with
means of considering part of profit on reducing pollution. In addition, product
adulteration and dumping have place additional responsibility on companies to
use various promotional strategies to change the company’s profit. Therefore,

58
business organizations should look into this area in order to achieve
predetermined objectives.

3. In additional, good and effective communication should exist between the

organization and the customer, employees, board of directors, shareholders and
the public. Therefore, it can be deduced that good communication is highly
important and relevant for the success of any establishment.

4. Finally, the adoption, suggestions from this work will help in creating
awareness in the mind of the management and employees cum business owners
that business environment is entitled to be given a paramount consideration in
order to achieve the purpose of setting up business.

5.4 SUGGESTIONS FOR FURTHER STUDIES

With respect to some limitations in the course of the research work, the
following are considered as areas that can be further researched into in the
nearest future;

1) Evaluation of the environmental factors influence on the survival and growth

of a business using econometric models

2) Correlational study of internal environmental factors of business and business

survival.

59
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H.S. HORNBY, (1998) Oxford Advance Learner Dictionary, 6th Edition.

JERRY M. ROSENBERG. (1978), Dictionary of Business & Management.

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61
 CHI-SQUARE DISTRIBUTION TABLE
d.f. .995 .99 .975 .95 .9 .1 .05 .025 .01
1 0.00 0.00 0.00 0.00 0.02 2.71 3.84 5.02 6.63
2 0.01 0.02 0.05 0.10 0.21 4.61 5.99 7.38 9.21
3 0.07 0.11 0.22 0.35 0.58 6.25 7.81 9.35 11.34
4 0.21 0.30 0.48 0.71 1.06 7.78 9.49 11.14 13.28
5 0.41 0.55 0.83 1.15 1.61 9.24 11.07 12.83 15.09
6 0.68 0.87 1.24 1.64 2.20 10.64 12.59 14.45 16.81
7 0.99 1.24 1.69 2.17 2.83 12.02 14.07 16.01 18.48
8 1.34 1.65 2.18 2.73 3.49 13.36 15.51 17.53 20.09
9 1.73 2.09 2.70 3.33 4.17 14.68 16.92 19.02 21.67
10 2.16 2.56 3.25 3.94 4.87 15.99 18.31 20.48 23.21
11 2.60 3.05 3.82 4.57 5.58 17.28 19.68 21.92 24.72
12 3.07 3.57 4.40 5.23 6.30 18.55 21.03 23.34 26.22
13 3.57 4.11 5.01 5.89 7.04 19.81 22.36 24.74 27.69
14 4.07 4.66 5.63 6.57 7.79 21.06 23.68 26.12 29.14
15 4.60 5.23 6.26 7.26 8.55 22.31 25.00 27.49 30.58
16 5.14 5.81 6.91 7.96 9.31 23.54 26.30 28.85 32.00
17 5.70 6.41 7.56 8.67 10.09 24.77 27.59 30.19 33.41
18 6.26 7.01 8.23 9.39 10.86 25.99 28.87 31.53 34.81
19 6.84 7.63 8.91 10.12 11.65 27.20 30.14 32.85 36.19
20 7.43 8.26 9.59 10.85 12.44 28.41 31.41 34.17 37.57
22 8.64 9.54 10.98 12.34 14.04 30.81 33.92 36.78 40.29
24 9.89 10.86 12.40 13.85 15.66 33.20 36.42 39.36 42.98
26 11.16 12.20 13.84 15.38 17.29 35.56 38.89 41.92 45.64
28 12.46 13.56 15.31 16.93 18.94 37.92 41.34 44.46 48.28
30 13.79 14.95 16.79 18.49 20.60 40.26 43.77 46.98 50.89
32 15.13 16.36 18.29 20.07 22.27 42.58 46.19 49.48 53.49
34 16.50 17.79 19.81 21.66 23.95 44.90 48.60 51.97 56.06
38 19.29 20.69 22.88 24.88 27.34 49.51 53.38 56.90 61.16
42 22.14 23.65 26.00 28.14 30.77 54.09 58.12 61.78 66.21
46 25.04 26.66 29.16 31.44 34.22 58.64 62.83 66.62 71.20
50 27.99 29.71 32.36 34.76 37.69 63.17 67.50 71.42 76.15
55 31.73 33.57 36.40 38.96 42.06 68.80 73.31 77.38 82.29
60 35.53 37.48 40.48 43.19 46.46 74.40 79.08 83.30 88.38
65 39.38 41.44 44.60 47.45 50.88 79.97 84.82 89.18 94.42
70 43.28 45.44 48.76 51.74 55.33 85.53 90.53 95.02 100.43
75 47.21 49.48 52.94 56.05 59.79 91.06 96.22 100.84 106.39
80 51.17 53.54 57.15 60.39 64.28 96.58 101.88 106.63 112.33
85 55.17 57.63 61.39 64.75 68.78 102.08 107.52 112.39 118.24
90 59.20 61.75 65.65 69.13 73.29 107.57 113.15 118.14 124.12
95 63.25 65.90 69.92 73.52 77.82 113.04 118.75 123.86 129.97
100 67.33 70.06 74.22 77.93 82.36 118.50 124.34 129.56 135.81
1

62
 APPENDICES

Department of Business Administration,

College of Management and Social Sciences,
Renaissance University, Ugbawaka,
Enugu State

Dear Sir/ma,

I am a student of the above named institution in the department of Business

Administration. The questionnaire below is needed to carry out a research study
based on academics purposes, titled EFFECTS OF ENVIRONMENTAL
FACTORS ON BUSINESS LOCATION. It is designed purposely to elicit
information that will aid research on the above caption.

Please feel free to complete the questionnaire, as all the information obtained
will be treated confidentially.

Your cooperation is highly appreciated.

Yours sincerely,
Okoroji Godswill Chinazam
Reg. No
RNU/BUS2013/0005

63
 QUESTIONNAIRE ON EFFECT OF ENVIRONMENTAL FACTORS
ON LOCATION OF BUSINESS.

SECTION A

1. Name (optional)

_____________________________________________________

2. Category of staff

Senior staff ( ) Junior staff ( )

3. Sex: Male ( ) Female ( )

4. Age group
18 – 30 ( ) 31 – 40 ( ) 41 and above ( )

5. Education qualification
NCE ( ) OND ( ) HND ( ) BSC ( ) MBA/M.SC ( )

SECTION B

64
1. Does the religion of the people around has a negative impact on the
product patronage?
a. Yes b. No c. No answer

2. Is there any change in the state of equipment used?

a. Yes b. No c. No answer

3. Does the system of education affect the supply of labor?

a. Yes b. No c. No answer

4. Does the technological level of this country affect your production level?
a. Yes b. No c. No answer

5. Do you think the relationship between the trade union and management of
this company is cordial?
a. Yes b. No c. No answer

6. Does the type of business pursued by the organization have a negative

effect on the environment?
a. Yes b. No c. No answer

7. Is there any change on your production method?

a. Yes b. No c. No answer

8. Do you render after sales services to your customers?

a. Yes b. No c. No answer
65
 9. Does the company provide a means to communicate with the society
through various social mediums?
a. Yes b. No c. No answer

10. Does the company charge extra fees for the after sales services rendered
to its customers?
a. Yes b. No c. No answer

66