CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY
The primary source of information concerning a firm’s performance is their financial statement that include the income statement, balance sheet, and cash flow and accompanying note. Also a company’s performance could be appraised on the basis of profit made in the year, the output level of the company and increased turnover and more efficient use of resources, in terms of input and output relationships. Critics argue that performance appraisal distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window- dressing; others also argue that it is in an attempt to pre-empt the role of government as a watchdog over powerful manufacturing companies (Armstrong, 2001). Performance appraisal system assists management to plan and control activities, and to make decisions which enable the objectives of the organization as a whole to be met. Performance evaluation could also be seen as the periodic review of result against set objectives and goals to reveal result, if there is any deviation if need be, corrective measures be put in place.
Performance appraisal is also a method by which the job performance of an employee is evaluated. Performance appraisals are part of career development and consist of regular review of employee performance within organizations. (Quchi, 2007).
A number of models or framework for conducting an organizational performance exist, the choice of which framework (or combination of frameworks) to use depends on the nature of the organization, on the purpose of the assessment and on the context in which the assessed organization operates (Mzenge, 2003).
Simons (1987) defines corporate performance using an approach of market mechanism by which the company actively interacts with the financial, factor and customer product markets. In the financial market, corporate performance strives to satisfy shareholders and creditors in the form of financial indicators. Different aspects of corporate performance have been important in strategic management and accounting research.
1.2 STATEMENT OF THE PROBLEM
Following the prevailing economic melt-down in the country, the performance of manufacturing companies has been on the decline, reported profit and sales is also on the decrease, expansion and growth is on the decrease too, and some factory went into extinction completely.
In practice, the operation and performance of manufacturing companies are evaluated and appraised to enable the management of such company take well informed decision.
The study, an appraisal of corporate performance of selected companies in the manufacturing sector is designed to evaluate, appraise the operations and performance of DN MAYER PLC.
1.3 OBJECTIVE OF THE STUDY
This research work is carried out on “an appraisal of corporate performance of selected companies in the manufacturing sector” a case study of DN MAYER PLC. The study is specifically carried out in an attempt to achieve the following objectives.
1.4 SIGNIFICANCE OF THE STUDY
The findings of this research study shall contribute to the existing body of knowledge in the field of accountancy.
The management of manufacturing industries shall also find this study relevant. The wide array of knowledge which the study shall generate will be useful to them in reducing cost and maximizing profit and sales, and will enable them choose the right alternatives in the decision making process.
In addition, this research study will assist company executives and shareholders in ensuring that appraisal of corporate performance is pivotal in the growth of the organization, since planning and controlling the resources of the organization are their primary concern.
1.5 RESEARCH QUESTION
For the purpose of this research study, several research questions are posed for the better understanding and to ascertain the impact of performance appraisal in the manufacturing sector. Therefore, the following questions are asked to guide us in the study:
1.6 RESEARCH HYPOTHESIS
In every research study, there exist basically two types of research hypothesis. They are the null and alternate hypothesis. The null hypothesis represents the negative implication and it is usually denoted (Ho) and the alternate hypothesis represents the positive implication and it is usually denoted by (H1).
H0: The appraisal of corporate performance does not have any significant impact in the manufacturing sector.
H1: The appraisal of corporate performance has significant impact in the manufacturing sector.
1.7 LIMITATION OF THE STUDY
The most limiting factor encountered in the course of carrying out this research work was lack of fund. Also the time duration required for the completion was too short.
1.8 SCOPE OF THE STUDY
It was the intention of the researcher that at least seven companies in Port Harcourt would be covered under study, but due to inherent difficulties such as time and financial constraint, it becomes practicably impossible to make contact with all the companies.
However, the research has confined the study to DN MAYER PLC in Port Harcourt.
This research is on appraisal of corporate performance of selected companies in the manufacturing sector. This research, chapter one represents the introduction, statement of the problem, the objectives of the study, the research questions, the research hypothesis, the scope of the study, significance of the study, limitation of the study and the reference.
DEFINITION OF TERMS
CORPORATE: Corporate is a business entity which has separate legal personality, with limited liability or unlimited liability for its members and shareholders, who buy and sell shares/stocks depending on the performance of the board of directors.
CORPORATE PERFORMANCE: Corporate performance can be defined as the organization’s ability to attain its goals by using resources in an efficient and effective manner.
APPRAISAL: A judgment or opinion of something or somebody, especially one that assesses effectiveness or usefulness.
PERFORMANCE: Working effectiveness, the way in which somebody does a job, judged by its effectiveness.
PERFORMANCE APPRAISAL: Is the periodic review of results against set objectives and strategies to reveal whether there is any deviation from plans and if need be, take a corrective actions.