This research investigated Terrorism and Organisational Productivity: A Study of Vita Foam Plc Onitsha. Three research questions and three hypotheses were raised. The descriptive survey research method was adopted and a sample size of 60 respondents was used for the study. Frequency tables, percentages, and mean were used to analyse the data. Z-test was used for testing the hypotheses. The findings revealed among others that; The activities of terrorism drastically reduce net profit of firms. Insecurity and terrorism has the ability to reduce the working capital of firms. The activities of terrorists have led to the loss of investors. Business growth has since the inception of terrorist activities continued to dwindle. Firms have experienced loss of contract due to the incidence of terrorism and insecurity. Rate of job loss has increased as a result of insecurity. Firms have closed down some of its production plant as a result of insecurity. The Company’s production capacity has reduced drastically due to terrorism. The researcher recommended among others that in other to reduce terrorism and improve the organisational performance, the government should crackdown on the source of funds for the terrorists, discourage the use of amnesty as it will create more problems, improve and upgrade its intelligence and surveillance equipment, overhaul the security outfit and redeploy the security personal and as well as severely punish security personnel found wanting.
TERRORISM AND ORGANISATIONAL PRODUCTIVITY: A STUDY OF VITA FOAM PLC ONITSHA
Terrorism affects firms: their physical assets, the lives of their employees, their knowledge base and their reputation. Terrorism did not start with the attack on the World Trade Centre in New York 2001, neither is terrorism limited to spectacular acts (Schelling, 1991). There is a banal version of terrorism with a long historical record for attacking special social groups, government organisations, public utilities, and, indeed, firms.
Terrorism in general terms refers to the intentional destruction of resources, in particular physical assets, and knowledge assets, i.e. the lives and knowledge of one individual or one group of people. In the eighties already attacks against business or other private interests added up to three quarters of all “anti-US-American” terrorists attacks (Kovsky, 1990). The prime target is not usually a person, in which case one would talk about a political murder, or a state, in which case one would talk about a civil war, but organization such as for example firms. The overall effect of terrorism is the reduction of the total capital stock of a society. Another consequence is the loss in worldwide trade. Thus for example based on data from 200 countries over the period 1960 – 1993 one study showed that “a doubling in the number of terrorist incidents (a rise by 100 percent) is associated with a decrease in bilateral trade by about 6 per cent” (Nitsch and Schumacher, 2002: 5) even if adjusted for alternative causes of violence such as political instability or military conflict.
Terrorism though widespread is not found in all countries, neither is terrorism a stable feature in the business world. Not all firms face the same risk in form of being singled out as targets for terrorist attacks, and not all firms occupy the highest position in the ranking of “worthwhile” targets all the time. For this reason alone terrorism must not be “accepted” as a form of natural hazard to which firms cannot but passively react. As will be shown in what follows, there is a subtle but crucial interaction between management strategies and a terrorist groups’ decision what, whom, how, and how often to attack. Only by analysing the interaction between firms operating in international markets and the rationale of terrorist groups, strategic variables can be singled out that help the management to systematically respond, if not anticipate terrorist hazard.
Nigeria as a nation-state is under a sever internal socio-economic and security threat. As a more general level, the threat has social, economic, political and environmental dimensions. Each of these dimensions has greatly affected the nation‘s stability, and can be traced to the ethnic militia armies, ethnic and religious conflicts, poverty, terrorism, armed robbery, corruption, economic sabotage, and environmental degradation (Ilufoye, 2009).
Boko Haram insurgence becomes the major problem facing Nigerians in the recent time. These groups have perpetrated several bombing that have killed millions of innocent citizens of this country Nigeria and also caused the destruction of both private and public properties worth of billion of naira. This derives from their bid to make people in the north east geo-political zone of Nigeria to embrace their view on Islamic Nigeria code and western education.
The predominant threat and security challenges in the area are emendating from un-abating attacks on Nigerian citizens, individuals, public and governmental installations, kidnapping and destruction of properties. All these effect of Boko Haram activities are serious crime against the Nigeria state, which has threatened its national security and socio-economic activities. This has posed great challenges to the organisational performance of the firms in the country.
Boko Haram activities, has destabilized socio¬economic activities. Disrupted economic activities of any kind in the three states where they hold sway. Increased crime and destruction of both life and property of Nigerian citizens. This can be attested to by the mass movement of people living in northern part of the country most especially maiduguri, which is the capital of Borno State. This situation has made it impossible for the citizens in that part of Northern of Nigeria to carry on their legitimate businesses. It is also scaring foreign investors out of the country. This project then attempts to investigate the impact of terrorism on organisational productivity.
1.2 Statement of the Problem
Recently, Nigeria was ranked in 14th in the list of the most failed states in the world out of the 177 countries considered in the ranking by the Fund for Peace, an American independent non-profit research and educational organisation that works to prevent violent conflicts and promote sustainable security in the world. When the pillar of national security is weak, the structure quivers and sends sensations to the occupiers and potential occupiers of such structures. This is the case with the Nigerian entity, where insecurity and unrelenting violence by several groups in the country have continued to pose a threat to the nation’s economy and investments.
Terrorism has always had huge financial implications and burden to the affected country. For example, it has been estimated that the city of New York alone lost US$21 billion as a result of the 9/11 terrorist attacks. With the establishment of the Homeland Security, the US Government now has to spend a whopping US$500 billion on security alone. Globally, it has also been calculated that world GDP decreased by a whopping US$3.6 trillion in 2002 as a direct and indirect consequence of terrorist activities in 2001. This amount can be put in perspective when we realise it amounts to a third of the GDP of the United States and exceeds the combined GDP of Argentina, Italy and Britain.
Another area of economic cost relates to the impact of terrorism on international trade supply chains, i.e. the sequence of steps that global suppliers of goods take to get products from one area to another (Mailafia, 2013). In a similar way, the budget of N921.91 billion earmarked to combat terrorism in Nigeria in the year 2012 alone, could have been deployed to development programmes that the nation desperately need.
Apart from the economic and monetary costs associated with terrorism, there are also social and psychological costs. Terrorism erodes inter-communal trust and destroys the reservoir of social capital that is so vital to building harmonious societies and pooling together community energies for national development. The attendant proliferation of small arms and the militarization of society results in a vicious cycle of violence which hampers national cohesion and stability. The long-term impact of such violence on cities and regions is best exemplified by the impoverishment that has affected Gombe Maidugari, Brono, Kaduna and Jos. Kaduna used to be one of the most prosperous cities in Nigeria. It was in many ways the industrial hub of the North, a cosmopolitan city with over a dozen textile firms and prosperous trading companies. The Kaduna of today is a tragically divided city in which Muslims live predominantly in the North and Christians predominantly in the South. All the textiles companies have shut down and most investors have packed up their businesses. The Jos Plateau is following a similar trend, as it loses its cosmopolitanism and local economies are destroyed. The tragedy is that the collapse of local economies and the erosion of social capital reinforce a downward spiral of further impoverishment, which in itself sows the seeds of further conflict.
For most of the north, the ongoing insurgency has had a significant negative impact on the regional economy. Lebanese and Indian expatriates who have established businesses in the terror torn north going back decades have relocated to Abuja and the south. A good number have left the country altogether. Hotels, banks and other business sectors have witnessed significant reductions in their activities. The border towns that have thrived on trade with neighbouring countries have also seen their businesses curtailed because of increasing restrictions on cross-border traffic. In Kano alone, an estimated 126 industries have recently closed down (Sunday Trust, 2012). Another trend is the massive movement of southerners from the north, many of them SME operators and professionals.
Boko Haram insurgency and terrorism is a bad signal to foreign investors. Economic experts have described President Goodluck Jonathan’s economic reform as an effort that may yield no results due to the insecurity in Nigeria. They also said the only problems with the nation’s economy were insecurity and mismanagement. A professor in the Department of Economics of the Ahmadu Bello University, Zaria, Dr. Usman Muttaka, who spoke to SUNDAY PUNCH recently on the telephone, said even if Jonathan had gone to Switzerland for the World Economic Forum, it would have yielded no result. He said, The president was in Australia for a similar summit with about 500 delegates and he has done nothing. He also went to France with about 300 delegates but there was no tangible result. The issue of investment is also about the issue of security. No investor will come to invest in Nigeria with the current security challenge (Baiyewu, 2012).
1.3 Objectives of the Study
The main objective of this study is to investigate the impact of terrorism and organisational productivity. Specifically it intends to;
a. The implication of terrorism on the financial status of Vita foam Plc Onitsha
b. The impact of terrorism on productivity of Vita Foam Plc Onitsha.
c. The impact of terrorism on trade and sales volume of Vita Foam Plc Onitsha
d. To profess possible solutions to the problems terrorism on the organizational productivity.
1.4 Research Question
The following research questions were raised based on the objectives of the study.
1. What is the implication of terrorism on the financial status of Vita Foam Plc Onitsha?
2. What is the impact of terrorism on productivity of Vita Foam Plc Onitsha?
3. What is the impact of terrorism on motivation of the employees and trade and sales volume of Vita Foam Plc Onitsha?
1.5 Research Hypothesis
Ho: Terrorism has no significant impact on the financial status of Vita Foam Plc Onitsha?
Ho: Terrorism has on significant impact on the productivity of Vita Foam Plc Onitsha.
Ho: Terrorism has no significant impact on trade and sales volume of Vita Foam Plc Onitsha?
1.6 Significance of the Study
This research is very crucial to organizations, as well as future researchers. It is important to organizations because it provides an empirical evidence of the impact of terrorism on the productivity of firms/organizations. Result from the study will help organizations to understand the factors that determine the scale of the cost of economic targeting and as such help them in defensive planning on the minimizing the cost of the terrorism on their productivity.
To the future researcher it will help them by contributing to the up to date material on the subject
1.7 Scope and Limitations of the study
This study covers the Vita Foam Industry Onitsha Anambah state
Finance problem is the fundamental problem that the researcher encountered. It is an unarguable fact that any worthy research is capital intensive. In fact for the researcher to accomplish this work he invested a lot of money on sourcing of various texts and necessary data which could not be readily found in the library. Much money was also needed for browsing and printing of valuable internet materials.
Insufficient time also impacted adversely on the work. This was as a result of the rush in the academic calendar as such the researcher has to limit this study to only Vita Foam Plc Onitsha Anambra state.
1.8 Definition of Terms
According to Dr Myra Williamson: “The meaning of “terrorism” has undergone a transformation. During the reign of terror a regime or system of terrorism was used as an instrument of governance, wielded by a recently established revolutionary state against the enemies of the people. Now the term “terrorism” is commonly used to describe terrorist acts committed by non-state or subnational entitiesagainst a state (Williamson, 2009).
Productivity is an overall measure of the ability to produce a good or service. More specifically, productivity is the measure of how specified resources are managed to accomplish timely objectives as stated in terms of quantity and quality. Productivity may also be defined as an index that measures output (goods and services) relative to the input (labor, materials, energy, etc., used to produce the output)
To define an organisation as a set of individuals practically collaborating in pursuit of common objectives immediately raises two questions: (1) How are these objectives pursued? (2) In particular, if collective action is necessary to achieve them, how is that collaboration produced?
Defining an organisation as the collective pursuit of objectives has two implications. First, realising an objective always requires the use of a specific technique (or ‘technology’; Damanpour, 1991) – applied to either a physical thing, or the behaviour of people within the organisations, or something in its environment. What way this is (i.e. what techniques are necessary and sufficient for the purpose) depends on the causal characteristics of the objects being manipulated, the physical characteristics of tangible object, the character of human motivation, and so on. These techniques can in principle be discovered (which is the part of the work of the sciences).