Measuring performance in Nigeria's state-owned enterprises

Performance of state owned enterprises in Nigeria reflects the necessity of studying this issue. It seems that in most countries, the performance in public management is more difficult to evaluate in comparison with the private sector. This is because in the case of private companies performance is reflected in their sales volume, in their incomes level, in their production ability, and other indicators. But public entities do not produce, sell, or commercialize products, making it difficult to evaluate their performance.

Therefore, the real question in such cases is how to measure performance in the public sector, and what does performance mean in the case of public management. Certain state owned enterprises can produce and sell certain goods. In such cases, their performance is measured by private sector standards. However, the implication of the state in the management of such enterprises makes it difficult to identify and to analyze their level of performance.

Literature Review

Nigeria Economy

The Nigerian Economy is one of the most developed African economies. The country benefits from a middle income level, determined by developed business sectors like communication, transportation, and financial services. In addition to this, Nigeria has the second largest stock exchange in Africa (Economy Watch, 2010). The country's economy relies on the petroleum industry. Most of the Nigerian petroleum is exported.

However, the country has reduced infrastructure levels. This means that investors are not interested in making efforts in order to address Nigeria's economy. In addition to this, it seems that the Nigerian authorities were not able to develop other industrial sectors.

Parental theories

Corporate and Social Governance

Corporate and social governance refer to the ethical standards that organizations must aim to reach in their attempt to improve their performance. Corporate social responsibility is a mix of activities intended to help companies organize their efforts into supporting the communities they address, in exchange of making profits from these communities. The situation is different in the case of the public sector. Public authorities have a more important role in social responsibility.

The Performance of State Owned Enterprises in Nigeria

It seems that the performance of employees of agencies and public enterprises is represented by budget monitoring, and annual performance evaluation. However, it seems that specialists in the field consider that the performance of these employees is not reflected in these indicators (Esu & Inyang, 2009). In an analysis developed by Bassey Esu and Benjamin Inyang of the University of Calabar, the authors presented a performance management system. This system is based on identifying the required performance, defining performance objectives, performance assessment, identifying a solution set, developing performance solutions, developing evaluation standards, implementation and monitoring. The analysis identifies the issues that the public sector is confronted with regarding performance and its evaluation.

Nature and Characteristics of State Owned Enterprises

State owned enterprises are intended to manage countries' economic activity under governments' control. They are usually characterized by poor management and reduced capitalization (Omran, 2003). Therefore, it is difficult to develop successful state owned enterprises. This situation is met in numerous countries, like Egypt, Nigeria, and certain European countries also. In order to improve their situation, most governments started privatization processes in their attempt to sell these businesses and make them more profitable. However, the selection of buyers was not always ideal. This means that certain investors were interested in the assets of these enterprises, but were not interested in investing in them. In order to privatize these enterprises, governments usually sell stocks through their stock exchanges. This is one of the reasons for which the Nigerian stock exchange is so powerful in the African region.

Policy of State Owned Enterprises

The policy of state owned enterprises focuses on the role that they have within national economies (Adeyemo, 2008). Basically, their role is to help governments control prices. This is mostly the case of prices on energy and petroleum. However, international organizations have increased their efforts into determining countries to liberalize prices by privatizing their state owned enterprises. In most cases, this strategy has determined increased competition on these markets, but also increased price levels.

Challenges Facing State Owned Enterprises

The most important challenge that state owned enterprises must face is represented by the reduced levels of capitalization. In order to reach the established objectives, it is required to increase investments. It is important to reach this objective in order to improve performance.

Conclusions

This research project intends to provide knowledge on addressing these gaps. This is intended to be considered a knowledge base for organizations and individuals that want to learn more on SOEs in Nigeria. The research is intended to examine the nature and performance of SOEs in this country. In addition to this, the research project intends to develop a model for management of SOEs in this country. This model can be addressed by authorities, which can provide input on developing such a model on performance.

Reference list:

1. Nigeria Economy (2010). Economy Watch. Retrieved June 4, 2013 from http://www.economywatch.com/world_economy/nigeria/.

2. Esu, B. & Inyang, B. (2009). A Case for Performance Management in the Public Sector in Nigeria. International Journal of Business and Management. Retrieved June 4, 2013.

3. Omran, M. (2003). The Performance of State Owned Enterprises and Newly Privatized Firms: Empirical Evidence from Egypt. Retrieved June 4, 2013.

4. Adeyemo, D. (2008). A Review of Privatization and Public Enterprises Reform in Nigeria. Contemporary Management Research.