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1 NIGERIAN JOURNAL OF BUSINESS, HUMANITIES AND INFOTECH An International Interdisciplinary Journal Volume 2, No. 2. November 2013. ISSN NO. 2315 - 6457 Published by The Imo State Polytechnic Umuagwo SPONSORED BY TETFUND INTERVENTION 2011 2 EDITORIAL BOARD Editor-in-Chief Dr. John S. Ezenwankwor Review/Discussion Editor Princess Tina Anyanjo Editorial Secretary: Mr. Chijioke Okoro Editorial Advisers: Dr. E.C.C Amaechi Mr. Chinedu B. Maduka Mr. Callistus Eke Dr. P.C. Aju Dr. D. Osuagwu Dr. A. Ukonu 3 NOTES ON CONTRIBUTORS Ogbonna Emma is a lecturer in the Department of Cooperative Economics and Management, Imo State Polytechnic Umuagwo. Okoro Chijioke belongs as well to the Department of Cooperative Economics and Management, Imo State Polytechnic Umuagwo. Onyechinyere Adaku is an academic staff of the Imo State Polytechnic in the Department of Office Technology and Management. Egbe Placid is a lecturer in the Department of Marketing, Imo State Polytechnic Umuagwo. Chinenye Michael Maureen writes from the Department of Cooperative Economics, Federal Polytechnic Nekede Owerri. Echeta Desmond is an academic staff of Imo State Polytechnic Umuagwo in the Department of Banking and Finance. Echeta Maryrose is of the Department of Science Laboratory Technology, Imo State Polytechnic Umuagwo. Unachukwu Uche belongs to the Department of Banking and Finance, Imo State Polytechnic Umuagwo. Ojiuko Austine is also of the Department of Banking and Finance, Imo State Polytechnic Umuagwo. Anukam Isaac writes from the Department of Marketing, Imo State Polytechnic Umuagwo. 4 TABLE OF CONTENTS Editorial Forward Edmund Igboanusi The moral Agenda of Information and Communication Technology for Development Chrysanthus Ogbozo Using Language but Communicating Nothing Nelson Udoka Ukwamedua A Post Modernist Response to Philosophy in the Third World John Ezenwankwor Third World and the Challenges to Freedom Princess Tina Anyanjor Literature, an effective tool in rebranding Nigerian students Isaiah Negedu Governance in Africa: Nigeria in Perspective Ethelbert Nnodimele Environmental Degradation: A threat to man and the Ecosystem B.C. Ekweruo Igbo Regional Landscape and Traditional Agriculture Paschal Ifeanyi Onyenwigwe Selection for Employment: Issues and Problems Chijioke Okoro and E.C.C. Amaechi 5 The Effects of Government Policy on Cooperative Development E.C.C. Amaechi and Chijioke Okoro Organization and management of Cooperative Business Enterprise Ethelbert Nnodimele Affordable/Cleaner Energy Alternatives for the Household 6 Editorial Forward The Nigerian journal of Business, Humanities and InfoTech, as a response to the present day problems of the society especially the developing world, accommodates issues from various fields especially as they relate to technology, management issues and some problems in the third world. Technology is here considered in its human dimension where it gains its proper meaning. It ceases to be meaningful when it ignores the values at the centre of human development and needs. In this maiden edition, Edmund Igboanusi challenges the view that technology or science is morally indifferent. He calls for an in-depth provision of moral parameters in approaching technology to fully benefit from it while at the same time protecting our human values especially the respect for human dignity as one created in the image of God with freedom to make choices. Shifting a little from the moral dimension of technology, Chrysanthus Ogbozo reviews the third world use of the technology of information dissemination. Using Nigeria as example, he adduces that a great majority of news items in Nigeria are elegantly presented but with very poor or sometimes untruthful content. He identifies language and its proper use as essentially important in every form of communication and therefore calls for its proper understanding. Communication is not simply the use of words or language; such use however becomes communication when they convey what is real and true. 7 With some obvious patriotic spirit, Nelson Ukwamedua frowns at the use of the term “third world.” He is particularly unsatisfied that the pains of colonialism are yet to be over as colonizers continue to dominate the African people. The use of the term ‘third world’ is particularly identified as a further way the colonizers use in derogatorily subjugating the African. He holds that such terms are only made to make the African who he considers to have proper philosophies and ideologies feel less confident about his ideas and views. In line with the poor picture already created about the third world countries, John Ezenwankwor considers freedom totally alien to the colonized third world nations because of their continued economic dependence on the so called first world. Patriotism is not limited to the defence of one’s land against colonisers but further requires action aimed at positive contributions to one’s land. In this light, still focusing on the third world, Isaiah Negedu, considers the issue of governance in Africa with particular reference to Nigeria. He declares that the central problem to governance in Africa is corruption. This evil according to him has its concomitant effect in bad management at all levels. The writer believes that leadership in Africa can change for good when there is attitudinal change which will only be ushered in by proper education and patriotic spirit. Such kind of spirit among many other ways could be achieved in Nigeria according Princess Tina Anyanjor through proper rebranding of the youths. She feels that the youth will be more effectively rebranded towards proper attitudinal change through the values of literature when they properly embrace them. 8 Apart from having the proper education and patriotic spirit considered very essential in managing the affairs of a nation, there are further areas that require proper and careful management which Ethelbert Nnodimele, B.C. Ekweruo and Paschal Onyenwigwe identified. They include the management of our environment, management of industries or firms for peaceful living and positive results. Nnodimele is saddened about the general attitude of people, particularly Nigerians which he considers detrimental to our environment and therefore calls for a change of attitude that will require taking proper care of our environment. Ekweruo considers the attitude to agricultural development as another unfortunate state of affairs in Nigeria. For him, agriculture has been so much neglected in the third world nations especially in the Ibo tribe of Nigeria because of its ‘subsistence’ tag by many governments. He therefore calls for a rethink in order to give agriculture its needed support. This, according to him, will make the Igbos of Nigeria specifically known for subsistence agriculture self reliant. A good environment with proper system of agriculture supported by the government is expected to bring forth a prosperous and peaceful society. This can only come about in a situation where there is proper organisation in the various firms and governmental agencies saddled with particular responsibilities necessary for implementing desired policies. To be able to have proper and functioning firms and agencies that will provide such desired results, Onyenwigwe calls our attention to an essential aspect of every organisation or firm namely selection or employment and management of qualified staff. He thinks that poor selection and management of staff can 9 spell doom to most firms. He considers the proper selection for employment as well as management of the existing staff as essential in maximizing the aims of every organization. A firm may have employed the best staff and used the best management system but may remain unproductive. This happens as identified by Chijioke Okoro and E.C.C. Amaechi when government policies are detrimental to the progress of firms. Particularly, they feel that cooperative firms are generally unproductive in Nigeria because of the long neglect of series of Nigerian governments in playing their part in developing cooperative firms. In the final part of this edition, Nnodimele offers us a practical way of protecting our environment by inviting us to the use of energy alternatives that is affordable as well as protective to the environment. Instead of deforesting our forests for firewood for example, he advocates the use of other alternatives that will not be destructive such as windmill and solar energy. John Ezenwankwor 10 STRATEGIES IN MOTIVATING SECRETARIAL STUDIES STUDENTS’ INTEREST IN EMERGING TECHNOLOGIES BY ONYECHINYERE ADAKU C. (MRS.) Abstract This study intends to look into motivating secretarial education students’ interest in emerging technologies. Virtually, in every human endeavor, technologies have been developed and applied to facilitate human activities. The secretarial works in office particularly have taken over the old ones which reveal the need to call the attention of students to new technology and knowledge in secretarial education. Secretaries nowadays utilize sophisticated office tools, machines and equipments. Students’ interests in these emerging technologies are of paramount importance and a source of concern to business education especially secretarial education. Adequate fund as well as necessary tools and manpower development should therefore be diploid to meet the emerging trends. This study is carried out using survey research design. Its findings reveal that teaching of Secretarial studies courses should be carried out using new office technological equipment and machines, practical work should be more than theory class and students should be encouraged to go through industrial training and professional development on the emerging technologies so as to enhance their interest in learning Secretarial Education. 11 Introduction Technology innovations have brought changes in all spheres of human endeavor, including acquisition of knowledge and skills in Secretarial Education on the new office technology equipment and machines which are utilized in the work place by secretaries and management staff. Secretarial Education and Technology are investments which yield large returns not only to education, but also to the social betterment of the people. Emerging office technologies/innovations are profound changes being introduced into office work as revealed by Agbamu (2005) who stated that these technological changes have made traditional office functions to be out modeled, the emergence of various modern technologies has changed the operations in modern offices. Onajaife (2006) posited that office systems have moved from typewriters, handwriting and manual operational procedures to full automation of most offices where such terms as word processing, data processing, reprographics and micrographic are used to describe many technological processes. He further stated that these technological processes have turned traditional offices into modern offices. Okolo (2006) revealed that the improvement in technologies has turned heap of files that are consulted very often to retrieve information into computers, fax machines, internet/intranet where paper speak no volumes anymore. The need to impact the skills and knowledge to the students by the business educators and to develop the students’ interest in these emerging technologies cannot be over emphasized because this will make the students to be relevant to the world of work in this contemporary time. Students of Secretarial Education are to attain and acquire these technological skills so as to be technologically acquainted with innovations as the world is turning to global village. 12 Akportohowo (2006) stated that the emergence of technology is fast gaining grounds as tapes/disks are taking place of sheets of papers and manual filing system systems. Okolo (2006) and Akportohowo (2006) opined that the emergence of office technology enables work to be done from different locations at different times. Ikelegbe (2006) stated that office automation and technology allow office functions like typing, filing, storing, retrieving etc to be automated. Secretarial Education which sometimes is called office education, secretarial studies or office systems management often make the skills and knowledge in emerging technologies available as training programme for Nigeria College of Education (NCE) students in Colleges of Education, Office Technology and Management in Polytechnics and other higher institutions where this course is offered. Ihekwoaba (2005) sees secretarial education as a business education programme which equips an individual to function effectively in business subjects. The secretarial profession is regarded as one of the most skilled professions. Therefore, a secretary should possess a combination of skills that will enable him function effectively in legal services, engineering services, Civil Service, religious, political and all sectors of the economy. A secretary according to Ihekwoaba (2005) is a person employed in an office to work for another person, dealing with letters, typing, keeping records and making appointments and arrangements. Secretaries have taken the advantage of these technology equipment and machines to achieve maximum result, improve productivity, effectiveness and prompt service delivery. Ihekwoaba (2005) holds that a student’s level of interest in learning emerging technologies is of paramount importance and a source of concern to the business educators in secretarial education. Students of secretarial education are often 13 found to have more interest in other courses than secretarial education which is their main course of study despite its relevance to the world of work most especially at this contemporary time where the whole world is turning rapidly to a global village and the emerging technologies have taken over most of the office activities and operations. He further opines that the current level of students in secretarial education is not encouraging, which is a reflection of their interest level in the course. It has come to a point where emerging technologies which are now taught in secretarial education should be used to enhance the interest of the students and different strategies have to be developed through innovative ideas to enhance secretarial education students in emerging technologies provided by secretarial education course which is the main purpose of this study. Statement of the Problem The innovations in technological development are deeply affecting traditional offices as well as teachers who are teaching Secretarial/Office Education. Most of the teachers are not exposed to modern office equipment and as such render the required skills and knowledge during the training irrelevant to the world of work which will make the secretarial job and operations difficult to carry out since offices today are dominated by modern technologies. Secretarial Education which is the only course which can make the skills and knowledge of these emerging technologies available for students is considered a difficult subject. Therefore, there is need to motivate the students interest in secretarial education with emphasis on the emerging technologies through necessary strategies so that their 14 skills can be useful to them and their world of work after graduation. Purpose of the Study The purpose of this study is to look into the strategies for motivating secretarial education students’ interest in emerging technologies. Basically, the study seeks to find out: 1. The level of students’ interest in emerging technology in secretarial education. 2. Challenges faced by secretarial education in emerging technologies. 3. Strategies for motivating secretarial education students interest in emerging technologies. Research Questions 1. What is the current interest level of students in emerging technology in secretarial education? 2. What are the various challenges faced by secretarial education in emerging technology? 3. What are the various ways of motivating the secretarial education students’ interest in emerging technology? Research Design Survey research design will be used for this study. This will enable the researcher to systematically describe the strategies for motivating secretarial education students’ interest in emerging technologies. Population and Sample The population for this study is Secretarial Education students in Office Technology and Management (OTM) selected from Imo 15 State Polytechnic Umuagwo, Ohaji through simple random sampling technique. This means that all the secretarial education students will be given equal chances of being included in the sample for the study. Instrumentation Structured questionnaire was used for the study to elicit information from the students of Office Technology and Management, Imo State Polytechnic Umuagwo Ohaji. The questionnaire assumed two sections; Section A was based on demographic data while Section B was on the entire variables and it assumed four point rating scale which are Very High (VH), High (H), Lower (L) and Very Low (VL). Data Collection and Analysis All data collected for this study came from a primary source and were collected directly from the Secretarial Education/Office Technology and Management students through the questionnaire which were self-administered by the researcher. All the data obtained were analyzed using means for the entire variables. Findings and Results Fifty questionnaires were administered, but forty four (44) were returned which means that 88% (44) of the sample were used for the study. LITERATURE REVIEW AND CONCEPTUAL / THEORITICAL FRAMEWORK Concept of Teaching Methods / Strategies. Teaching Methods according to Daughtery (1974) are the broad pattern of thinking which a teacher follows to help students 16 reach the goal set for the course. In other words, they are the strategies adopted and used by teachers in transferring learning in a classroom teaching – learning process. They are techniques, ways, principles or strategies that enable the teacher to communicate the lesson. These are attributes expected of a good teaching method which is to be used to teach specific lesson. A method that is appropriate to one kind of material may not be suitable for another. Therefore an appropriate teaching method needs to be carefully selected. Okeke (1997) as cited by Ifeagwu (2000) lists some of these characteristics of teaching: (a) A teaching method should provide useful activities that would help the learners to discover facts and contribute effectively to the learning activities. (b) The teaching method chosen should allow the teacher to present the subject matter beginning from known to the unknown; from simple to complex. (c) Teaching office Education involves various activities which can be grouped under: - Teacher centered method, Demonstration, Questioning techniques, Textbook method, Visual aids and Demonstration : This is a method or technique of Teaching Concept; principles or real things by combining oral explanation with the handling or manipulation of real things, equipment or materials. Okorie (1986) holds that demonstration method is one of the teacher’s greatest assets in arriving at fundamental skills and practice in a very short period of time especially for any subject that deals with skill acquisition and teaching various trades by job trainees in industries. 17 Excursion/Field Trips / Industrial Attachment Study: A field trip is a journey outside the classroom to observe and discover knowledge in a real life situation. Field Trip enables students to study industrial processes first hand and to see the relevance of laboratory and workshop practical. (Olatoke, 2005). Field trips afford the students the opportunity to have experience on the practices or operations different from what was taught in the school. Field trip is very important in the teaching of office education courses because real life practices and operation going on in the world of work is exposed to the students when they undertake excursions / trips. Teaching with the use of Audio / Visual aids and multimedia. The rates of learning through the five senses give an immediate picture of the vital role of audio – visual materials in teaching learning process with particular reference to office education courses. According to Aroleye (1986), information reaches the brain through the five senses – sight, smell, taste, touch and hearing. Office education courses are partly cognitive and skill-based courses. Audio-visual materials which are in the form of real object, machines/equipments are of paramount importance. Research Question 1 1. What is the current interest level of students in emerging technologies in secretarial education? 18 Table 1: Items on students’ level of interest in emerging technologies. S/N Item Statemeent V H L VL X Decision 1 2 3 4 I like secretarial education course because of the skills and knowledge that are provided through the course. I prefer secretarial education to other courses. It exposes someone to the new office technological equipment and machines. I have keen interest in learning the new office technologies machines and equipment such as fax machines, point of sale (POS) machines, computer, internet, reprography machines etc. I like to build my career in secretarial education because of the constant development in office technological equipment and machine. H 22 22 - - 3.50 Accepted 21 16 5 2 3.27 Accepted 22 19 3 - 3.43 Accepted 10 20 7 7 2.75 Accepted 19 Table 1 above shows that most of the respondents agreed that they like Secretarial Education/Office Technology and Management course because of the skills and knowledge that are provided through the course and that it exposes them to the new office technological equipment and machines such as fax machines, point of sales (POS) machines, computer, internet, reprography machines, etc. Most of the respondents revealed that they like to build their career in Secretarial/Office Education because of the constant development in Office Technological equipment and machines. All the items were accepted based on the decision that their mean ratings were greater than 2.5 cut off point. Research Question 2 What are the various challenges faced by Secretarial Education in emerging technologies. Table 2: Items on challenges faced by Secretarial Education in emerging technologies. S/N Item Statement VH H L VL X Decision 5 Secretarial Education 13 20 6 5 2.93 Accepted 6 department do not have most of the new office technological equipment used in the world of work. Emerging Office Technologies are often difficult to learn in Secretarial Education Department. 5 11 20 21 7 2.32 Rejected 7 8 I often find it difficult to perform very well in office technological equipment and machines because of the way the lecturers teach the concept. More theoretical concept are being taught than practical work in teaching emerging office technologies. 9 10 18 7 2.48 Rejected 18 11 8 7 2.91 Accepted Table 2 above shows that most of the respondents agreed that secretarial education department do not have most of the new office technological equipment needed in the world of work and that more theoretical concept are being taught than practical work in teaching emerging office technological equipment and machines in secretarial education. Item 5 and 8 were accepted based on the decision that their mean ratings were greater than 2.5. Research Question 3 What are the various ways of motivating the secretarial education students’ interest in emerging technologies? Table 3: Items on ways of motivating the secretarial education students interest in emerging technologies. S/N Item Statement VH H L VL X Decision 9 In teaching the new 30 10 3 1 3.75 Accepted office technological equipment and 21 10 11 12 machines, practical work should be more than theorical work. Industrial training in office technology should be maximally encouraged in students. In-service training and professional development should be provided for secretarial education lecturers on the emerging technologies. Government should adequately provide the current equipment and machines to the department so that what lecturers are teaching can be relevant to the world of work. 20 23 1 - 3.43 Accepted 21 18 3 2 3.32 Accepted 35 8 - 1 3.75 Accepted Table 3 above shows that most of the respondents agreed that in teaching the new office technological equipment and machines, practical work should be more than theory class; industrial training in office technology should be maximally encouraged in students; in-service and professional development should be provided for secretarial education lecturers on the emerging technologies and that Government should adequately provide the current equipment and machines to the department so that what lecturers are teaching can be relevant to the world of work. 22 All the items were accepted based on the decision that their mean ratings were greater than 2.5 cut off point. Discussion of Findings The study found out that most of the students in secretarial education/Office Technology and Management were female in their early twenties (20s); single and most of them used for this study were in the final year which was their graduating years. Further, most of the respondents have more interest in typing than shorthand. The finding of this study revealed that students like secretarial education course because of the skills and knowledge that are provided through the course; exposure to new office technological equipment and machines, learning of application of new office technological machines such as fax machine, point of sale (POS) machines, computer, internet, reprography machines etc in the world of work. Also most of the students in secretarial education have interest in building their career in secretarial education because of the constant development in office technological equipment and machines. The available ones are not well utilized while some of them are obsolete and have spoilt beyond repair. In teaching the new office technological equipment and machines, practical work should be more than theory class. To achieve this, the findings revealed that government should adequately provide current equipment and machines to the department, and that lecturers should be made to go through in-service training and professional development on the emerging technologies. Industrial training in Office Technologies should be maximally encouraged among students so that what the lecturers in the department are teaching will be relevant to the society. 23 Recommendations Based on the findings of this study, the following recommendations are made: Teaching of secretarial education should always be made to apply ICT in teaching and all available office technologies equipment. In a situation where some of the modern office equipment is not available, lecturers as well as students should embrace excursion to companies and organizations that deal with the office technologies so that the graduates of this course can acquire skills and knowledge relevant to the modern society. Government and college administrators should try as much as possible to provide new and adequate office technologies, old ones should be replaced, worn-out ones should be repaired so that the department can provide training programmes which can make the graduates of the course acquire skills and knowledge which can be used to achieve self-reliance and to be able to cope with the world of work in using the emerging technologies to achieve effective work performance and high productivity. Excursion should be encouraged to both the students and lecturers to offices with modern technologies and machines. Conclusion This study has looked into strategies in motivating secretarial education students’ interest in emerging technologies. Students’ level of interest in learning emerging technologies in secretarial education is of paramount importance and a source of concern to the business educators. Government should give adequate support financially. Schools and Colleges should be involved in industry-institution based programmes in providing skills and knowledge and emerging office technologies to the lecturers in terms of in-service training, on-the-job training. Seminars and 24 workshops should be encouraged so that lecturers can have adequate skills and knowledge to teach the students and make them to acquire the best skills which will be useful for them in the world of work and to be self-reliant in the business world. 25 References Agbamu, T. P. (2005). Restructuring business teaching education through information and communication technology driven curriculum. Business education journal 1, 10, 17. Akportohowo, F. C. (2006). Effect of modern information and communication technology on secretarial and general office workers. Journal of office management and technology 1 (p. 65 74). Ikelegbe, S. (2003) Effects of Information and Communication on Management efficiency. Journal of Office Management and Technology 1 (1), 265 271. Ihekwoaba, M. E. (2005). Introduction to Vocational Technical Education. Shomolu: mukugamu & brothers enterprises. Onojaife, C. A. (2006). Effects of Modern Information and Communication Technology on secretarial workers. Journal of Office Management and Technology 1 (p. 51 58). Okolo, A. N. (2006). Effects of Information and Communication Technology on secretarial workers. Journal of Office Management and Technology 1 (p. 155 169). 26 THE CONCEPTS: ADVERTISING SPIRAL AND THE PRODUCT LIFE CYCLE BY EGBEH, PLACID C. (NNIM, Mnimn) OF THE DEPARTMENT OF MARKETING ABSTRACT Marketing strategic decision-making focuses on products and markets. Other marketing mix elements of which promotion is one of them are equally important but facilitate product-market decisions. Marketers believe that like human beings, products have a life cycle and that advertising emphasis should change with the life cycle of a product if one is to maximize a product’s life time profitability. This paper looks at the advertising spirala chart that parallels a product’s life cycle-and how as a marketing management decision tool it can help companies create better campaign, improve their overall advertising capabilities, enhance product perception, positioning, market share and profitability. Keywords: Product life cycle, advertising spiral. INTRODUCTION Marketing in simple terms is the identification of human needs and wants and satisfying them profitably. Product (goods and services) are used to satisfy these needs and wants. Outside placing a value on products and ensuring their availability, 27 target audiences also have to be made aware of the existence of needs-satisfying goods and services. Products however have a life span. They get born, experience growth and eventually become obsolete and abandoned. Considering this scenario, the challenge facing the marketer is not only to ensure that his product goes the full, cycle but that the product’s life time profitability is maximized. Predictor variables like market factors, advertising factors and customer factors can be used by the marketer to accomplish this. The focus of this paper shall however be on an aspect of the advertising option called the “advertising spiral”. We wish to point out at this stage that the focus of this paper is not about the product life cycle concept. We will only highlight some of its aspects as will be useful for the main focus our paper which is advertising spiral. THE PRODUCT LIFE CYCLE The product life cycle is a business analysis tool which attempts to identify a set of common stages in the life of commercial products (Wikipedia, 2013). It is an important concept in marketing and describes the stages a product goes through when it was thought off until it finally disappears (Riley, 2012). Muhs (1985) quoting Day (1981) likens the product life cycle to the biological analogy of birth, growth, maturity and decline. According to him, the first full exposition of the concept as we know it today appeared in 1957 during the 39th National Conference of the American Marketing Association in a paper presented by Conrad Jones who was involved in new product planning. Quoting Muhs, Jones posited that “There are compelling forces behind this drive for new products. There is a life cycle that is characteristic of many-if not most-products. 28 Since all products are ‘new’ at their outset, we can call it the basic life cycle for new products”. A reproduction of this life cycle by him is shown below. THE BASIC LIFE CYCLE OF NEW PRODUCTS Source: Muhs W.F. (1985) “The Product Life Cycle Concept”, P: 3 The concept and the stages as earlier propounded by Jones remain relevant till date. Modern writers on the subject matter including Kotler (1999) and Perreault and McCarthy (2003) have however reduced the stages to four and which are market introduction, market growth, market maturity and sales decline. Anyanwu (2003) however included a pre-introduction stage which Dawe (2013) argued is not necessary as the main application of the concept is to guide the type of marketing activities to focus on. BASIC ASSUMPTIONS OF THE CONCEPT 29 According to Kotler (I999), to say that a product has a life cycle is to assert four things. Products have a limited life Product sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. Profits rise and fall at different stages of the product life cycle. Products require different marketing, financial, manufacturing, purchasing and human resources strategies in each stage of their life cycle. Contributing to the subject matter, Perrault and McCarthy (2003) added that; product life cycles describe industry sales and profits for a product idea within a particular period and that sales and profits of an individual brand may not, and often do not, follow the life cycle pattern. They may vary up and down throughout the life cycle-sometimes moving in the opposite direction of industry sales and profits. Furthermore, a product may be in a different life cycle stages in different markets. According to them, product life cycles also vary in length and may take only 90 days incase of toys to possibly 100 years as examplified by petrol engine cars. How long a product life cycle takes and the length at each stage is basically a function of the comparative advantages the product has over its competitors, how easy it is to use and how its advantages can he communicated to the market. On the subject matter, Riley (2013) opined that there are no set schedules for the stages of a product life cycle. Differences will occur based on the type of 30 product, how well it is received in the market, the promotional mix of the company, and the aggressiveness of competition. Cravens (1982) agrees with Perrault and Riley that all product sales do not follow the life cycle curve but that many do or would, if adjustments in corporate strategies were not made to alter life cycle patterns. According to him, the basis of the life cycle analysis is that a new product starts out in the introductory stage, moves next to a growth stage, then to maturity, and eventually declines and possibly dies. Sales start to build up in the introductory stage, expanding at an increasing rate until late in the growth stage, then reaching a maximum total during the maturity stage and finally leveling off at the declining stage. The quoted authors were however united in their view that consumer perception determines the stage of the product and must be worked upon. While in agreement with the positions of the quoted authors on the basic assumptions of the PLC concept, I feel that in addition marketers should not assume that every time product sales peak and then decline, a product is in the final stages of its life cycle and marketing support should therefore cease. Marketers need a wide range of data and analysis to help them determine the phase a product is in and whether it can be extended through marketing action. USES OF THE CONCEPT Agbonifoh et al (1998), Craven (1982), Riley (2013) and Dawe (2013) all agree that the product life cycle concept is not just a planning but a strategic marketing planning tool. From their 31 works on the subject matter, we arrive at the following as the areas it can be applied in strategic marketing planning. Each stage in the product life cycle is often linked with changes in the flow of raw materials, parts and distribution to markets. Inputs must therefore be adjusted in line with increasing competitions. Depending upon the life cycle stage, product-market attractiveness will, in general, decline as the product advances through the stages. A good knowledge of the life cycle stage will enable management make appropriate adjustments in resource applications. As the stages in the product life cycle correspond with foreseeable increases or decrease in revenues, the PLC, factor shall allow for business strategies to be planned in concert with the marketing mix to maximize a brand’s potentials during each stage. When used alongside carefully analyzed sales figures and forecasts, it provides a useful guide to marketing tactics that may be most appropriate at a given time. The four stages not only represent the awareness of the product in the eyes of the consumer but the profit resulting from product sales which helps marketing management shape marketing and pricing. Recognition of the life cycle stresses the importance of new product planning since older products are not likely to grow and contribute to profits as much as new products. Management requirements at different stages also vary; thus corporate and marketing functions will vary depending on the life cycle stages. 32 It is also a useful tool for monitoring sales results overtime and comparing them with products having similar life cycles. THE ADVERTISING SPIRAL The advertising spiral is a chart that parallels a product’s life cycle and points out what to be done in each stage of the product’s life (Eneida M., 2006). In the opinion of Anyanwu (2003), it depicts a situation where goods, services or ideas are positioned in the market by the instrument of advertising. According to Muhs (1985), the term “advertising spiral” was first used in 1931 by Otto Kleppner in his classic text Advertising Procedure in which he labeled his version of a product life cycle as the “advertising spiral”. Though his focus was on advertising he conceptualized a product life cycle and stated thus”. This evolutionary process is one in which most products participate, and can be traced as it passes through three phases, the “pioneering” stage, the “competitive” stage and the “retentive” stage. What the advertisements for any given product shall say depends largely upon the stage in which the product finds itself at that time. Kleppner envisioned an evolutionary cycle which can go through a transition and start another cycle-the spiral effect. The product stretches out to include new buyers or new uses of the product and a time may finally come when the answer is to find new products. Kleppner’s view is very interesting and useful. 33 Following this position, companies can only survive by constant search for new users or new buyers for their existing products. Continuous innovation should however be the rule rather than the exception. The society (market) is dynamic with human needs, wants and tastes are continuously changing. The only way for companies to survive is to move along with the times. The concept as propounded by Kleppner has stood the test of time in spite of the several critical reviews including Anyanwu’s review with the addition of a ‘phasing out stage’ to the stages in the spiral. For the purposes of this article however, the three stage process comprising the pioneering, competitive and retentive stages shall be adopted. THE STAGES OF THE ADVERTISING SPIRAL Muhs (1985), Agbonifoh et al (1998), Chan (2013) and McFarlin (2013) with Anyanwu (2003) differing all agree with Kleppner that the advertising spiral should contain only the pioneering, the competitive and retentive stages. The spiral which derives from the forms of advertising as per the product life cycle shall be briefly discussed hereunder. Pioneering Stage Pioneering advertising refers to new forms or new ways of getting across a marketing message. Advertising at this stage places emphasis on establishing a need on the consumer’s mind and illustrating how the product will solve that need. Competitive Stage Advertising here focuses on the consideration of your product as better as or worse than that of your competitors as well as 34 finding out how they market their products and the improvements on the techniques they use. Retentive Stage Retentive advertising is referred to as reminder advertising. In this case, the consumer is already well aware of the product being offered and does not need to be convinced to buy it. The idea behind the advertising spiral is that marketers believe that advertising a product should not be a static process. Overtime, consumers become familiar with a product. When this happens, advertisers are required to change their marketing communications accordingly. APPLICATIONS OF THE SPIRAL WITH REGARDS TO PRODUCT LIFE CYCLE As earlier pointed out, the advertising spiral as a management decision tool is a chart that parallels a product’s life cycle pointing out what has to be done in each stage of the product’s life. The spiral provides a point of reference for determining which stage or stages a product has reached at a given time in a given market and what the thrust of the advertising message should be. It is important for deciding on strategy and giving a creative team a clear perspective on what information it needs to communicate to prospects, customers and consumers. According to Chan (2010), it can be used to answer the following questions with regards to the product life cycle. In which stage is a product? Should we use pioneering advertising to attract new users to this product? 35 Should we work harder at competitive advertising to obtain a larger share of the existing market? What portion of our advertising should be pioneering and what portion competitive? Are we simply coasting in the retentive stage? If so, should we be more aggressive? Chan notes that these questions are relevant considering the fact that A product may hold existing customers while seeking new markets with pioneering advertising. Products do not move through the stages at the same speed. The predictive role of the advertising spiral with regard to the product life cycle can however be fully appreciated if the stages in both concepts are matched with one another. COMPARATIVE ANALYSIS OF THE STAGES IN BOTH CONCEPTS Though Anyanwu (2003) quoting Zikmund and Damico (1995) included a pre-introduction and decline and/or phasing out stage in his comparative analysis of the two concepts, all other existing works on the subject matter limited the stages to three namely: Market introduction/pioneering stages Growth/competitive stages Maturity/retentive stages In agreement with Eneidam (2006), we adopt the three stages of the advertising spiral as corresponding to the four stages of the product life cycle. 36 A. MARKET INTRODUCTION This stage corresponds to the pioneering stage of the advertising spiral. According to Chan, consumers at this stage pay little or no attention to the new product regardless of the manufacturer’s efforts at developing and promoting it because sometimes the need has not occurred to consumers. They consequently do not feel a compulsion to buy the product. For a product to survive this stage the role of advertising shall be to implant a new custom, change habits, develop new usage and cultivate new standard of living. The purpose of advertising at this stage of the product life cycle is to educate consumers about the new product or service. Advertising at this stage should stress on what the product can do, offer or provide that could not have been done, offered or provided by any product before. Advertising aims at convincing consumers that they can accomplish something they couldn’t before through the use of the new product. It must show that previous ideas or conceptions are antiquated, previous methods have been improved and that past limitations have been overcome. B. GROWTH STAGE This stage corresponds to the competitive stage of the advertising spiral. Marketers assume that this is a very crucial stage in the life of a product in that product positioning must be accomplished at this stage. This stage attracts the highest advertising expenditure as advertisers try to build selective rather than primary demand. At this stage, a pioneering product gets accepted by consumers engendering competition since consumers have desire for it. Advertising at this stage should focus on communicating the products position and differentiating the products to the consumers. At this stage, the 37 emphasis is no longer to introduce consumers to a brand but to give them a reason why the product is superior – its superiority over similar brands must he established in order to gain preference. Anyanwu (2003) opines that the ultimate leader will be the brand that offers consistent and unbroken promise to the consumers. C. MATURITY STAGE The maturity stage corresponds to the retentive stage of the advertising spiral. Anyanwu, (2003), Eneida M. (2006), McFarlin (2013) and Chan (2010) are however of the opinion that the period should include the decline stage of the product life cycle – an opinion Agbonifoh et al (1998) shares. The advertising goal at this stage is to maintain market share and ward of consumer trial of other products. The strategy should focus on reminder and emotional adverts aimed at encouraging repeat purchase. Little copy is necessary as the consumer does not need much information. The ad should be highly visual and may feature only the brand name of logo as the product is now well known by consumers. Emphasis should be placed on the reinforcement of brand name. Institutional advertising should also be made use of. 5.0 CONCLUSION Having critically reviewed the concepts of advertising spiral and the product life cycle, I wish to make the following conclusions. Companies can only survive if they can delight consumers through their product offerings. Such product offerings lose their appeal and profit potentials over time i.e. their life cycle. Companies must therefore strive to put measures in place to maximize the profit potentials of their products over their life 38 time. A management decision tool that will be of much help in accomplishing this is the concept of the advertising spiral. 39 REFERENCES Agbonifoh, B.A., Ogwo, O.E., Nnolim, D.A., (1998), Marketing in Nigeria: Concepts, Principles and Decisions, Aba: Afritowers Limited. Anyanwu, A. (2003), Promotional Strategy: A schematic Approach, Owerri: Avan Publishers Ltd. Chan, R. (2010), “The Advertising Spiral And Brand Planning”, cwx. Prenhall. Com 1…/CHO3.doc. Cravens, D.W., (1982), Strategic Marketing, Homewood Illinois: Richard D. Irwin, Inc. Dawe, T, “What Are Product Life Cycles”, www.ehow.com>ehow>Business. Retrieved August 2013. Eneida, M. (2006), “What is Advertising spiral? “in.answers.yahoo.com. Kotler, P., (1999), Marketing Management, New Delhi: Prentice Hall of India. McFarlin, K. (2013) “The Stages of Advertising Spiral”, small business.chro.com. Retrieved, August 2013. Muhs, W.F. (1985), “The Product Life Cycle Concept”. Origin And Early Antecedents”, www.ideals.illinois.edu. 40 Perreault, D.W. and McCarthy, E.J. (2003), Essentials of Marketing, New York: McGraw Hill. Riley, J. (2012), “The Product Life Cycle”, www.tutorZu.net/business/goose/market. Wikipedia, “Product Life Cycle”, en.wikipedia.org/…/product life cycle. Retrieved August 2013. 41 COOPERATIVE GOOD GOVERNANCE AND ITS IMPACT IN NATIONAL DEVELOPMENT. BY MICHEAL MAUREEN CHINENYE Department of Cooperative Economics and Management Federal Polytechnic Nekede Owerri E-mail address: [email protected]. Abstract The term good governance is widely used today everywhere in the in the world. Almost all major development institutions today say that promoting good governance is an important part of their agenda. Good governance is arguably the single most important factor in eradicating poverty and promoting development. Despite this consensus, “good governance” is an extremely elusive subject. It means different things to different organizations and different actors within these organizations. We will be concerned in the following pages with cooperatives governance as a channel towards societal enhancement. INTRODUCTION Good Governance has as its pillars transparency, accountability, risk management and control. Though the Co-operatives Act 2005 and the Co-operatives (Amendment) Act 2006 have made provisions for greater transparency and accountability at the level of co-operative societies, the Cooperatives Division of the Ministry of Industry, Small and Medium Enterprises, Commerce and Co-operatives has worked out this Code of Best Practices, in consultation with main stakeholders of the co-operative 42 movement. The Code of Best Practices provides effective guidelines for the proper functioning of co-operatives and eventually ensures sound co-operative development. Cooperative governance regulates the relationship between members of co-operatives, the Board of representatives of members (that advises management on behalf of members) and management (that has the care and control of the co-operative). Good governance includes decision making processes that affect a country’s economic activities and its relationship with other economies. It is a situation where the elected bodies direct, control, and exerts authority concerning the affairs of the governed to stimulate and bring about positive changes in their lives. The governance is perceived to be good when those elected work diligently to see to the maintenance of the masses. According to International cooperative alliance (ICA), a cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise. GOOD GOVERNANCE Governance is "the process of decision-making and the process by which decisions are implemented or (not implemented). The term governance can apply to corporate, international, national, local governance or to the interactions between other sectors of society. The concept of "good governance" often emerges as a model to compare ineffective economies or political bodies with viable economies and political bodies. The concept centers on the responsibility of governments and governing bodies to meet the needs of the masses as opposed to select groups in society. There is no single and exhaustive definition of “good 43 governance,” nor is there a delimitation of its scope that commands universal acceptance. The term is used with great flexibility; this is an advantage, but also a source of some difficulty at the operational level. Depending on the context and the overriding objective sought, good governance has been said at various times to encompass: full respect of human rights, the rule of law, effective participation, multi-actor partnerships, political pluralism, transparent and accountable processes and institutions, an efficient and effective public sector, legitimacy, access to knowledge, information and education, political empowerment of people, equity, sustainability, and attitudes and values that foster responsibility, solidarity and tolerance. According to Eyinla (2002) as cited by Uzoh (2011), good governance means accountability, security of human right and civil liberties, devolution of powers and respect for local autonomy. There is a significant degree of consensus that good governance relates to political and institutional processes and outcomes that are deemed necessary to achieve the goals of development. It has been said that good governance is the process whereby public institutions conduct public affairs, manage public resources and guarantee the realization of human rights in a manner essentially free of abuse and corruption, and with due regard for the rule of law. The true test of "good" governance is the degree to which it delivers on the promise of human rights: civil, cultural, economic, political and social rights. The key question is: are the institutions of governance effectively guaranteeing the right to health, adequate housing, sufficient food, quality education, fair justice and personal security? Fashiola (2011) noted that advancement in the area of social welfare, education health care, employment and the 44 protection of the human rights are considered indicative of good governance. ATTRIBUTES OF GOOD GOVERNANCE Good governance has some attributes/characteristics. It is generally considered participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive, and follows the rule of law. Good governance is responsive to the present and future needs of the organization, exercises prudence in policy-setting and decisionmaking and focuses on the best interests of all stakeholders. Below are some of the principal attributes of good governance. Rule of Law: Good governance requires fair legal frameworks that are enforced by an impartial regulatory body, for the full protection of stakeholders/members. Transparency: Transparency means that information should be provided in easily understandable forms and media; that it should be freely available and directly accessible to those who will be affected by governance policies and practices and its decisions are in compliance with established rules and regulations. Responsiveness: Good governance requires that organizations and their processes are designed to serve the best interests of stakeholders/members within a reasonable timeframe. Consensus Oriented: Good governance requires consultation to understand the different interests of stakeholders/members in order to reach a broad consensus of what is in the best interest of 45 the entire stakeholder group and how this can be achieved in a sustainable and prudent manner. Equity: The organization that provides the opportunity for its stakeholders/members to maintain, enhance, or generally improve their well-being provides the most compelling message regarding its reason for existence and value to society. 6. Effectiveness and Efficiency: Good governance means that the processes implemented by the organization to produce favorable results meet the needs of its stakeholders/members, while making the best use of resources – human, technological, financial, natural and environmental – at its disposal. Accountability: Accountability is a key tenet of good governance. Who is accountable for what should be documented in policy statements. In general, an organization is accountable to those who will be affected by its decisions or actions as well as the applicable rules of law. Participation: Participation by both men and women, either directly or through legitimate representatives, is a key cornerstone of good governance. Participation needs to be informed and organized, including freedom of expression and assiduous concern for the best interests of the organization and society in general. THE CONCEPT OF COOPERATIVE GOVERNANCE Unlike shareholder organizations, the cooperative society is one hundred percent democratically controlled and jointly owned by its member-owners. Large or small, each member-owner has an 46 equal vote at the Annual General Meeting. Co-operative governance regulates the relationship between members of cooperatives, the Board of representatives of members (that advises management on behalf of members) and management (that has the care and control of the co-operative). The main function of cooperative governance practices is to ensure that executives pursue the goals determined either by owners or by those responsible for strategic decisions and not their own goals. The good co-operative governance will (a) ensure that board and management pursue objectives that are in the interests of cooperatives and members. In this way, the Board of Directors is representative of diverse membership. (b) Lead in effective monitoring of activities of societies. (c) Ensure efficient and effective use of available resources. (d) Reduce conflicts and (e) Increase accountability and transparency in co-operatives. Cooperative business as an organization has its own governance which regulates the relationship between the members, the board of directors, council of inspectors, audit committee and management. MEMBERS: The general meeting is made up of all registered members of the society. Members are the foundation of the cooperative and the society is organized in line with their needs. Their support, through patronage and capital investment keeps it economically healthy. Their changing requirements shape the cooperative's future. Members collectively elect the Board of Directors. (Michael M.C. et al 2013). Statutory law and the basic legal documents of cooperative articles of incorporation, bylaws, and contracts between the cooperative and its members give the members the tools to control the cooperative and the duty to use those tools for their mutual benefit. 47 BOARD OF DIRECTORS: Board of Directors in a cooperative occupies a key position between members and hired management. They are both users of its services and representatives of other members who depend on the same services. Acting as a group, Board of Directors set the objectives for the cooperative and make decisions that set the course the cooperative will follow in achieving those objectives. At the local level, which is made up of primary societies and secondary societies, this body is referred to as management committee, while at the National and International level, this elected body that is made up of co-operative professionals and experts which may be employed to manage the affairs of the society is referred to as Board of Directors. COUNCIL OF INSPECTORS: These are supervisory committees in cooperative society. They are not members of the Management committee but are elected by the members at their annual general meetings to monitor the activities of the management committee on behalf of the members. They are being referred to as watch dogs of the society. They are empowered to have access to the books and records of the society. They have the power to summon special or emergency meetings if there is need. (Obi-okogbuo 2011). AUDIT COMMITTEE: An Audit Committee may be defined as a Committee of non-executive Directors, responsible for liaising with the full Board, Internal Audit and External Audit. It may be composed of 3 to 5 nonexecutive members (members of the Board of Directors who are neither officer nor employees having the responsibility to maintain contact with the internal and independent auditors of the society). The Audit Committee 48 shall abide with the following codes of ethics and good governance: MANAGEMENT: The Management should control the activities of the cooperative society, ensure that policy decisions taken by the Board are implemented, follow the objectives and guidelines set out by the Board, ensure that the functioning of the society is in line with co-operative values and principles, and the Co-operatives Act 2005 and the Co-operatives (Amendment) Act 2006. This body is accountable to the board as well as the general meeting vested with the highest powers. CONTRIBUTIONS OF COOPERATIVES IN THE GLOBAL ECONOMY AND SUSTAINABLE DEVELOPMENT It is estimated that one million cooperatives are active around the world, serving the needs of one billion members and providing jobs to over 100 million people. The top 300 cooperatives from all activity sectors combined generate 2 trillion dollars in global revenue. This figure is comparable to the world's ninth largest economy. The global cooperative movement represents the largest democracy and most impressive educational system in the world by virtue of cooperatives' democratic governance and the role they play in educating their elected officers and members on the economy and on democracy. Cooperatives exist in all sectors of the economy and impact all aspects of life. In many countries, they are key players in such sectors as manufacturing, agriculture, retail, financial services and social services. Wherever cooperatives are active, they strengthen the communities they serve and in addition to their 49 significant economic contributions, they also play a major role in social and human development. It cannot be over emphasized the important contribution that cooperatives make to the socioeconomic well-being of people and communities and to a balanced and more stable plural economy. Cooperatives make unique and relevant contributions because: They are rooted in the values and principles of cooperation. They have a long-term commitment to their communities and the environment. They have a solid democratic governance process that encourages people to participate in the management of their cooperative and provides training in democracy. They promote job creation and retention in the communities they serve. They strive to be profitable, not as an end in itself, but to effectively meet the needs of their current and future members. They contribute to the stability of the economy because their actions are based on a long-term perspective and their strategies are people-oriented. They use a business model that is robust and viable, at the local, national and international levels. They are very resilient. They support the development of the technological infrastructure geared to young people and make it easier to share information. They encourage governments to include cooperative studies in their school curriculums. They help the next generation of entrepreneurs develop new cooperatives and finally they create proper atmosphere for future cooperators. SUSTAINING COOPERATIVE POTENTIALS IN A CHANGING AND FRAGILE ECONOMY Cooperatives today are helping many international organizations fulfill their missions and are contributing to the achievement of the Millennium Development Goals. This is due to their involvement in the areas of food security, poverty reduction and 50 access to healthcare, gender equality, and mitigating the impacts of crises on high-risk populations. Their unique participative governance and democratic practices based on the principles and values of cooperation also support sustainable development. To continue to maximize their full potential within a changing world and fragile economy, cooperatives must: Continue to improve their overall performance and remain competitive to ensure their longevity Aim at successful and sustainable business growth, guided by member needs and environmental sustainability Demonstrate a greater capacity for innovation Remain relevant and current by training their employees, elected officers and members Prepare future cooperators Promote and support the creation and development of new cooperatives. Acquire a greater competitive edge by leveraging their close relationship with their members Systematically identify members' needs that have not been properly addressed yet Become more organizationally agile within the parameters of their mission and the principles that guide their actions Clearly communicate and show how they are different Join forces with other cooperatives through partnerships and collaborative agreements to promote cooperative movement. 51 CONCLUSION Cooperative governance, which is based on transparency, the democratic election of officers, member participation, and a long-term vision, allows cooperatives to build a relationship of trust with their members, employees, clients and communities. The close relationship that cooperatives have with their members explains their exceptional ability to meet their needs. The shared vision that inspires them leads to more concerted action. To continue to stand out in a globalized and technologically advanced economy, cooperative business enterprises must be proactive so as to be able to withstand the rapid changes that impact their environment. RECOMENDATIONS Important decisions are currently being made around the world without considering the unique aspects of the cooperative model. This is because the model is not very well-known or recognized, even though it has demonstrated its ability to be successful. It has survived crises better than many other models thanks to its distinct ownership structure and capital stability. To prevent their business model from being overlooked or weakened, and to allow them to gain political influence that is more in line with their global economic influence, cooperatives must: Combine their efforts and resources to give their international interventions greater impact Commit the necessary resources to promote and spread the word about their achievements and tangible contributions to the world's socio-economic development, and the innovative ways in which they have responded to today's challenges 52 Intensify their representation activities in order to make themselves better known to policy-makers and be considered in stimulus and economic development projects Commit the necessary resources to develop new cooperatives and to support their networks, and encourage governments to do the same. Communicate their financial, social, human and environmental achievements more effectively. Get researchers interested in the cooperative movement and set up an international cooperative knowledge and database to serve as a foundation, so that cooperative studies become an essential component in the academic and business world. Prepare the next generation, make room for young leaders and encourage their participation in cooperative activities. 53 REFERENCES Co-operative governance http://www.cooperators.ca/en/AboutUs/why- coops-are-better/co-operative-governance.aspx retrieved on 23/05/2013 Creating a culture of board excellence http://www.governancepro.com/news/ retrieved on 22/05/2013 Dare, A. eet al. (2010): Globalization, Good Governance and Democracy: The Interface. Academic Leadership: the on line Journal, Vol 8, Issues 3, Summer 2010. Held, D. et al, (2004). Global Transformation: Economics and Culture. Stanford, Oxford university press. International Co-operative Alliance Organization http://www.aciamericas.coop/What-is- the-InternationalCo. Retrieved on 29/12/2012 Landell, M.P. & Serageldin, I. (1991): Governance and the External Factors in the Proceedings of the World Bank Annual Conference on Developmental Economics Michael M.C. et al (2013): Principles and Practice of Cooperation. Enugu, hunicon Int’l publishers. Obi-Okogbuo.J. E. (2011): Theme in Co-operative Economics. Owerri. Advanced Publishers. Torado, M & Smith, S.C. (2006): Economic Development, Growth and Planning. 9th Edition. Pearson Education Limited, England. 54 Uzoh, O. (2011): What Nigeria Needs to have Good Governance. The sun, Saturday October 1, 2011, vol. 8, No. 457. 55 FOOD SECURITY, POVERTY ALLEVIATION, AGRICULTURAL PRODUCTIVITY AND THE DYNAMICS OF ECONOMIC GROWTH IN NIGERIA ECHETA DESMOND .O. Department of Banking and Finance Imo State Polytechnic Umuagwo E-MAIL [email protected]/[email protected] PHONE: +2348037248832 ECHETA MARYROSE .O. Department of Science Laboratory Technology Imo State Polytechnic Umuagwo UNACHUKWU UCHE .O. Department of Banking and Finance Imo State Polytechnic Umuagwo OJIUKO AUSTINE .A. Department of Banking and Finance Imo State Polytechnic Umuagwo Abstract The problem of food insecurity resulting from poor agricultural productivity with its attendant high poverty level in Nigeria cannot be over emphasized , hence, the need to examine food insecurity, poverty alleviation, agricultural productivity and dynamics of economic growth in Nigeria. The total departure of the Nigerian economy from agricultural setting in the 50’s and 56 60’s when agriculture contributed up to 82 percent of total export in 1960 to what holds in the 70’s and beyond when agriculture contributed less than 5 percent while crude oil share rose to 92 percent is a source of worry. This is indicated by the continued rise in poverty level from 28.1 percent in 1980 to 65 percent in 1996. Secondary data from CBN Statistical bulletin were collected for the period 1980 to 2010. Solow-Swan neoclassical growth model was employed in analyzing the growth dynamics of the Nigerian economy. Employing dynamic econometric approach, the research showed that a long –run relationship exists between gross domestic product and all the independent variables; food security, number of poor people and agricultural productivity. The study recommends that any economic policy that will make the Nigerian non oil sectors perform effectively will improve the economy. Consequently domestic agricultural policies should be pursued with vigour and government should declare state of emergency on agriculture and other non oil sectors to achieve the desired growth. Key words; Poverty Alleviation, Food security, Agriculture, Productivity, GDP, Granger Causality, Stationary 1. Introduction In most Sub-Saharan Africa, food security and agricultural productivity is yet to account for positive changes in growth patterns. In the framework of addressing the growth imperatives of the Nigerian economy, agricultural production challenges, food insecurity and poverty are the bane. This is true based on the knowledge that majority of Africans (Nigeria inclusive) live 57 in rural communities, where poverty and social exclusions are severe. In economic growth and development economics it is expected that innovations in agriculture will translate to more food (food security) which will in turn reduce poverty. To Xinshen, et al (2007) agriculture-led growth played an important role in slashing poverty and transforming the economies of many Asian and Latin American countries. They are of the view that this has not been replicated in Africa. For example, Nigeria is endowed with numerous natural resources that are capable of driving growth, yet agriculture and food security lag behind thereby worsening the poverty profile. In the words of Echeta, et al (2013) 1.2 billion people in the world live in extreme poverty (less than one dollar per day). Agricultural output is important in any economy because of its role in the growth process. Hirschman, (1958) theorized the linkage effects in the growth process to include backward and forward linkages created by investments in the industrial sector. However, Xinshen et al (2007) citing Johnson and Mellor (1961) contrasted this fact and emphasized the existence of production and consumption linkages both in agricultural and nonagricultural sectors. Interestingly, agricultural production generates forward Production linkages when agricultural outputs are supplied as inputs to further production in the nonagricultural sector. This is basically seen in the agro-processing and processed food market which provides growth opportunities for import substitution. Agriculture exhibits backward linkage through its demand for intermediate inputs such as fertilizers. Haggblade, et al (1989) in Xinshen et al (2007) noted that these production linkages are likely to deepen as an economy modernizes, but decline in relative importance alongside agriculture’s share of production. 58 STATEMENT OF PROBLEM Agricultural development was targeted as a key factor to driving industrialization in the seventies. However, industrial strategy was not channelled towards supporting agriculture. Unexpectedly, the import substitution agenda of the seventies and eighties did not show any significance in sourcing raw materials domestically but was tuned towards imports. During the Nigeria’s independence in 1960, agriculture was contributing 64 percent of the GDP. With the oil boom of the 1970’s crude oil had over taken agriculture as the largest contributor of government revenue and major foreign exchange earner (Eboh,2011). Eboh (2011) hinted that by 1970, crude oil’s share of total exports had reached 58 percent while agricultural share of total export had dropped from 82 percent in 1960 to 30 percent in 1970. By 1974, crude oil share of total exports had risen to 92 percent while agriculture share of total exports had dropped to less than 5 percent. This scenario continued unabated and eventually led to the crowding out of the agricultural sector by the petroleum sector. The boom from the oil sector led to overvalued exchange rate and loss of competitiveness of Nigeria’s non-oil sectors (manufacturing industries and agriculture). This is captured by the Dutch Disease syndrome. Also worrisome is the fact that, different agricultural sector initiatives such as the National Accelerated Food Production Programme (NAFPP) in 1975, Operation Feed the Nation (OFN) in 1976, Land Use Decree of the 1978, the River Basin and Development Authorities (RBRDAS), Green Revolution in 1980, Agricultural Development Projects (ADPs) Directorate for Food, Roads and Rural Infrastructure (DFRRI) in 1986 and others did not improve the precarious situation of 59 declining food production. Eboh (2011) holds that by early 2000s, the economy had shrunk to about $45 billion, and income per capita nosedived from about $1150 in 1981 to mere $300 in 2001. He further stressed that line rose from 28.1 percent in 1980 to 65 percent in 1996. This is disturbing as it leads to deterioration in human development indicators (Life expectancy, literacy rate, Mortality rate, and per capita income (Median Income). The nutritional status of the average Nigerian remained precarious as the country consistently recorded deficit average per capita calorie intake and continued on a downward move towards a situation where about 100 million people will be forced into destitution. The objective of this paper is to examine the relationship between growth of the Nigerian economy and each of the independent variables of poverty, food security and agricultural production. It will therefore be answering the following questions; what is the relationship between the growth of the Nigerian economy and net export of food? What is the relationship between the growth of the Nigerian economy and poverty level in Nigeria? Is there any relationship between agricultural contribution to the gross domestic product and the Nigeria growth dynamics? 2. Literature Review Conceptually, there is a link between nutrition and economic growth. Inadequate access to food increases malnutrition and reduction in labour productivity which is the breeding ground for poverty. Nadav (1996) employing the extended Solow growth model emphasizes the importance of nutritional capitals using data from 97 countries and found that nutritional levels have a large and significant impact on economic growth. This finding corroborates Fogel’s result (1991) that increased calorie 60 intake, reduced mortality and raised productivity among the working poor during early stages of Western Europe’s development. Forgel holds that engaging the ultra-poor into the labour force and raising the energy available for work by those in the labour force explains about 30 percent of the British growth in national median income (per capita income) over twenty years. Xinshen,et al (2007) citing Timmer (1989); Alesina and Perotti (1993) maintaines that agriculture affects economic growth through its potential to stabilize domestic food security. They are of the view that periodic food crises undermine both political and economic stability. Albeit food imports are likely to palliate such crises temporarily, they are not significant option in addressing long-term food security. Theoretically, Awokuse, (2009) borrowing from (Lewis, 1954; Hirschman, 1958; Fei and Ranis, 1961; Jorgenson, 1961) contends that agricultural sector does not have strong linkages to other sectors and lack adequate innovative structure necessary for fostering higher productivity and export growth. Similarly, Matsuyama (1992) refutes the claim that agricultural productivity is an engine of economic growth. To Schiff and Valdez (1998) many countries in response to the findings of Matsuyama (1992) promoted anti-agriculture programmes emphasizing the role of the manufacturing sub-sector. Gollin et al (2002) argue that growth in the overall economy depends on the development of the agricultural sector. To Ravallion and Datt (1999) agricultural growth, as opposed to growth in general, is typically found to be the primary source of poverty reduction. However, recent empirical evidence exists on the relationships between agricultural value added and economic growth. Tiffin and Irz (2006) cited in Awokuse (2009) found strong evidence that there is causality from agriculture to 61 economic growth for developing countries, but the causality results for developed countries were inconclusive. On poverty, Dollar and Kraay (2002) showed that growth has a significant impact on poverty reduction, but there is substantial variation in the literature about the extent to which poverty declines. This current study is unique because it has incorporated other variables like number of poor people, net food export combined with agricultural contribution to GDP to gauge the impact on the growth dynamics of the Nigeria economy. Theoretically, we shall align this work on the agricultural-led growth hypothesis which contends that investment in agriculture and consequent creation of infrastructure and institutions in other sectors is the link for national economic growth. 3 Theoretical Frameworks and Model Specification The Solow-Swan neoclassical growth model will be adopted in analyzing the growth dynamics of the Nigerian economy (Solow, 1952). The model assumes constant returns to scale aggregate production functions given as Yt = Where L = labour Kt Lt Bt ……………………………………………………..(1) Y = real GDP per capita K = real gross capital B = Hicks-neutral productivity term Consequently, the contribution of each of the explanatory variable could be modeled thus; GRGDP = F(FODSE, NOPOP, AGPRO) ------(2) or GRGDP = F(FODSEt, NOPOPt, AGPROt)-----(3) 62 Equation 2 and 3 are the same only that subscript t is added (subscript “t” denotes the time period). In a more compact way equation 3 changes to equation 4 given as GRGDPt = FODSENOPOPβAGPRO--------(4) Taking the log transformation and adding the stochastic variable, equation 4 transforms to equation 5 given as; LNGRGDPt = LNFODSEt+βLNNOPOPt+LNAGPRO-----(5) Econometrically, equation 5 is rewritten in regression equation form as; LNGRGDP = βo+β1LNFODSEt+β2LNNOPOPt+β3LNAGPROt+Ut------(6) Where LNGRGDPt = Growth rate of GDP at LNFODSEt = Growth rate of Net food export LNNOPOPt = Growth rate of number of poor people LNAGPROt = Growth rate of agricultural contribution to GDP Ut = the Stochastic variable or error term βo is the intercept while βis are the coefficients to be estimated where i = 1----3 On the apriori expectation Β1>0, β2<0, β3>0 63 4. Empirical Results, Interpretation and Discussion of Findings The set of data used in the analysis consist of annual time series over the period 1980 to 2010. The data were mainly in variables of interest (they include GDP, agricultural productivity (output), number of poor people and food security. However, net food export was used as proxy for food security. The data were obtained from Central Bank of Nigeria and World Bank bulletins. To make our data clearer for the analysis and to capture the growth dynamics of the Nigerian economy, we converted all variables to their respective growth rates. We also took the natural logarithms of all the variables to reduce possible problems associated with heteroscedasticity. The univalent time series properties were ascertained using the Unit root test that employed augments Dickey and Fuller (1979). The test results for each of the variable in the system proved to be I(1); however, only the NOPOP is found to be non-stationary at levels but achieved stationarity after first differencing. Based on this fact that our variables are integrated of I (1), we then engaged the co-integration test to ascertain if there is long run equilibrium relationship existing amongst variables of the model. The result implies that the null hypothesis of nocointegration could be rejected at the 5 percent and 1 percent significance level. In this way, the results suggest that a long run relationship exists between Gross domestic product growth and all the independent variables; food security, number of poor people and agricultural productivity(See appendix for the unit root test results and co-integration test results ). Consequently, the nature of the relationships were investigated using the ordinary least squares estimation technique (OLS) 64 Table 1: OLS result of our model Dependent Variable: LNGRGDP Sample: 1980 2010 Included observations: 31 Variable Coefficien Std. Error t t-Statistic Prob. C LNFODSE LNNOPOP LNAGPRO -0.045100 0.055892 0.322082 0.591498 -0.074654 0.544391 1.778286 3.932548 0.9410 0.5906 0.0866 0.0005 R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.479351 0.421501 1.061973 30.45025 -43.70975 1.904877 0.604127 0.102670 0.181119 0.150411 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 1.879866 1.396247 3.078049 3.263079 8.286122 0.000456 Source: E-views econometric analysis of the study. (2013) From Table 1, the long-run regression coefficient of all the variables has positive relationship with the growth of the Nigerian economy. However, it is only agricultural productivity (LNAGPRO) that appears to have a positive and statistically significant effect on the growth dynamics of the Nigerian economy. Food security had its hypothesized sign of positive relationship with growth of the Nigerian economy but is not significant in explaining changes in growth. The number of poor people surprisingly has positive relationship with the growth of the Nigerian economy. Although, not significant in 65 explaining the changes in growth. This negates the earlier hypothesized sign of negative relationship with the dependent variable. On the global statistics our adjusted R – squared has its value as 0.421501 which means that 42% of the variations in GDP growth is explained by the independent variables of LNFODSE, LNNOPOP and LNAGPRO. The remaining 58 percent is accounted for by the variables not included in our model. F-statistic is 8.286122 with probability of 0.000456 meaning that our model can be used for meaningful policy analysis in the long run. The Durbin Watson (DW) statistics is within range. We are not surprised because of the initial data massaging exercises. DW result suggests reasonable reduction of heteroscedasticity. Sample: 1980 2010 Lags: 2 66 Table 2: Granger causality test result Source: E-views econometric analysis of the study. (2013) The result of the Granger Causality, Table 2 shows that none of the variables of interest Granger is the cause for the other. This means that the null hypothesis could not be rejected. The result of the Granger Causality was conducted at the 5 percent level of significance with respect to 2 lag length. Discussion of Findings In our empirical result food security is positive but insignificant statistically in explaining variations in GDP growth. This is in line with earlier study of Awokuse, (2009) that export as an engine of growth in Africa is weak. Nigeria from our result is on the down side of export. This makes Nigeria net importer and recipient of food aid. This has serious negative implication for poverty reduction in Nigeria. This means that Nigeria will continue to import food to sustain domestic consumption. The number of poor people violated the a priori expectation of negative relationship with growth dynamics of the Nigeria economy. We are not comfortable with this, but we have this as 67 the explanation: In Nigeria, as GDP is growing, the numbers of poor people are equally increasing. This is true because over the years in Nigeria, government fiscal policy to reduce poverty is yet to have any effect. The huge sums got from the Petro-dollar merely led to the appreciation of the GDP, but not able to be translated to poverty reduction. Thus, as GDP increases, the number of poor people increases thereby worsening the growth dynamics of the Nigerian economy. In our result, agricultural productivity (output) was found to have positive and significant relationship with economic growth. This corroborated the findings of Awokuse, (2009) using data for 15 countries, concluded that agricultural value added has significant contribution to total economic growth. Recall also that immediately after independence many African countries (Nigeria inclusive) were net exporters of non-oil merchandize especially agricultural products. However, this trend changed on the emergence of oil as the main stay of most economies in Sub Saharan Africa. Conclusion and Recommendation In development economics, diversification of the economy is superior to mono-cultural system. The incidences of poverty and food security have remained the raging issue and are increasingly dominating international discussions. Most commentators argue that food security and increase in agricultural output is a precondition for growth of any economy. The main crux of this paper is to examine food security, poverty, agricultural productivity and the growth dynamics of the Nigeria economy. Using the Nigeria data, the empirical analysis provided evidence that food security, agricultural 68 productivity and number of poor people are all positive functions of growth of the Nigerian economy. The study provides evidence that any policy that will make the non-oil sector to perform effectively will improve growth of the economy. This is captured by the positive and significant relationship existing between agricultural output and growth of the Nigerian economy. Agricultural output will help to boost food supply in Nigeria thereby helping to make Nigeria net exporter instead of net importer. The synergy created here will automatically reduce poverty by increasing per capita income. RECOMMENDATION We therefore recommended that; Domestic policies on agriculture should be pursued with vigour. Researches done by tertiary institutions on improved varieties of crops should be made available to entrepreneurs for utilization (i.e. the gown meeting the town) Policies leading to poverty reduction should not be mere political gimmick but should be given the desired fiscal support. The Nigeria government must as matter of urgent national issue declare state of emergency in the agricultural sector and other non-oil tradable. This will reposition Nigeria as a net exporter of food, earning enough exchange to support the growth of the economy and having enough for consumption domestically. 69 REFERENCES Alesina, A. and R. Petrotti (1993). Income Distribution, Political Instability and Investment. Working paper 4486. National Bureau of Economic Research (NBER) Cambridge Mass. Awokuse, T.O. 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Research Report, International Food Policy Research Institute 2033 K Street Washington. 73 Appendix Unit root test Levels of lngrgdp Null Hypothesis: LNGRGDP has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -6.203267 -3.670170 -2.963972 -2.621007 0.0000 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNGRGDP) Method: Least Squares Date: 05/25/13 Time: 09:17 Sample(adjusted): 1981 2010 Included observations: 30 after adjusting endpoints Variable Coefficien Std. Error t t-Statistic Prob. LNGRGDP(-1) C -1.016255 0.163826 1.761245 0.362432 -6.203267 0.0000 4.859520 0.0000 R-squared 0.578824 Mean dependent var 0.056857 74 Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.563782 1.167772 38.18337 -46.18620 1.610003 S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 1.768098 3.212413 3.305826 38.48052 0.000001 1s dif Null Hypothesis: D(LNGRGDP) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -9.129758 -3.679322 -2.967767 -2.622989 0.0000 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNGRGDP,2) Method: Least Squares Date: 05/25/13 Time: 09:21 Sample(adjusted): 1982 2010 Included observations: 29 after adjusting endpoints Variable Coefficien Std. Error t D(LNGRGDP(-1)) -1.367780 0.149816 C 0.070696 0.255415 R-squared 0.755329 Adjusted R-squared 0.746268 t-Statistic Prob. -9.129758 0.0000 0.276788 0.7841 Mean dependent var 0.271073 S.D. dependent var 2.720501 75 S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 1.370367 50.70345 -49.25034 2.051650 Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 3.534506 3.628802 83.35249 0.000000 Levels of lnfodse Null Hypothesis: LNFODSE has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -4.866714 -3.670170 -2.963972 -2.621007 0.0005 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNFODSE) Method: Least Squares Date: 05/25/13 Time: 09:22 Sample(adjusted): 1981 2010 Included observations: 30 after adjusting endpoints Variable Coefficien Std. Error t t-Statistic LNFODSE(-1) C -0.904289 0.185811 3.021243 0.703465 -4.866714 0.0000 4.294800 0.0002 R-squared 0.458256 Adjusted R-squared 0.438908 Prob. Mean dependent var 0.116666 S.D. dependent var 2.722853 76 S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 2.039582 116.4771 -62.91562 1.962379 Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 4.327708 4.421121 23.68490 0.000040 1st dif Null Hypothesis: D(LNFODSE) has a unit root Exogenous: Constant Lag Length: 3 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -5.221288 -3.711457 -2.981038 -2.629906 0.0003 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNFODSE,2) Method: Least Squares Date: 05/25/13 Time: 09:23 Sample(adjusted): 1985 2010 Included observations: 26 after adjusting endpoints Variable Coefficien Std. Error t t-Statistic Prob. D(LNFODSE(-1)) D(LNFODSE(-1),2) D(LNFODSE(-2),2) D(LNFODSE(-3),2) C -2.902930 1.430052 0.788409 0.561304 0.290746 -5.221288 3.058291 2.424108 3.054705 0.671198 0.0000 0.0060 0.0245 0.0060 0.5094 0.555980 0.467598 0.325237 0.183750 0.433174 77 R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.821490 0.787488 2.192179 100.9186 -54.52324 1.864800 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.118705 4.755375 4.578711 4.820652 24.16017 0.000000 levels of lnnopop Null Hypothesis: LNNOPOP has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -2.576661 -3.670170 -2.963972 -2.621007 0.1088 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNNOPOP) Method: Least Squares Date: 05/25/13 Time: 09:31 Sample(adjusted): 1981 2010 Included observations: 30 after adjusting endpoints Variable Coefficien Std. Error t t-Statistic LNNOPOP(-1) -0.463734 0.179975 -2.576661 0.0155 78 Prob. C 0.879447 0.373033 R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.191667 0.162798 1.064735 31.74252 -43.41505 1.844202 2.357558 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.0256 0.059094 1.163661 3.027670 3.121083 6.639181 0.015539 1st dif Null Hypothesis: D(LNNOPOP) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -6.274775 -3.679322 -2.967767 -2.622989 0.0000 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNNOPOP,2) Method: Least Squares Date: 05/25/13 Time: 09:33 Sample(adjusted): 1982 2010 Included observations: 29 after adjusting endpoints Variable Coefficien Std. Error t D(LNNOPOP(-1)) -1.228578 0.195796 79 t-Statistic Prob. -6.274775 0.0000 C 0.067833 0.218298 R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.593207 0.578140 1.175569 37.31299 -44.80388 1.896494 0.310734 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.7584 0.069982 1.809940 3.227854 3.322150 39.37280 0.000001 Levels of lnagpro Null Hypothesis: LNAGPRO has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -5.440821 -3.670170 -2.963972 -2.621007 0.0001 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNAGPRO) Method: Least Squares Date: 05/25/13 Time: 09:34 Sample(adjusted): 1981 2010 Included observations: 30 after adjusting endpoints Variable Coefficien Std. Error t t-Statistic LNAGPRO(-1) -0.817293 0.150215 -5.440821 0.0000 80 Prob. C 1.438520 0.335224 R-squared 0.513910 Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.496550 1.033535 29.90945 -42.52281 1.004792 4.291222 0.0002 Mean dependent var 0.068976 S.D. dependent var 1.456622 Akaike info criterion 2.968187 Schwarz criterion 3.061601 F-statistic 29.60253 Prob(F-statistic) 0.000008 1st dif Null Hypothesis: D(LNAGPRO) has a unit root Exogenous: Constant Lag Length: 0 (Automatic based on SIC, MAXLAG=8) Augmented Dickey-Fuller test statistic Test critical values: 1% level 5% level 10% level t-Statistic Prob.* -7.429124 -3.679322 -2.967767 -2.622989 0.0000 *MacKinnon (1996) one-sided p-values. Augmented Dickey-Fuller Test Equation Dependent Variable: D(LNAGPRO,2) Method: Least Squares Date: 05/25/13 Time: 09:35 Sample(adjusted): 1982 2010 Included observations: 29 after adjusting endpoints Variable Coefficien Std. Error t D(LNAGPRO(-1)) -0.967733 0.130262 81 t-Statistic Prob. -7.429124 0.0000 C 0.129705 0.189689 R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat 0.671500 0.659334 1.019730 28.07593 -40.67966 2.397699 0.683774 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.4999 0.212809 1.747111 2.943425 3.037721 55.19189 0.000000 Co integration test result Date: 05/25/13 Time: 09:48 Sample(adjusted): 1982 2010 Included observations: 29 after adjusting endpoints Trend assumption: Linear deterministic trend Series: LNGRGDP LNFODSE LNNOPOP LNAGPRO Lags interval (in first differences): 1 to 1 Unrestricted Cointegration Rank Test Hypothesized No. of CE(s) Eigenvalue Trace Statistic 5 Percent Critical Value 1 Percent Critical Value None ** At most 1 At most 2 At most 3 55.70227 26.55713 11.02849 1.274721 47.21 29.68 15.41 3.76 54.46 35.65 20.04 6.65 0.633957 0.414606 0.285618 0.043004 *(**) denotes rejection of the hypothesis at the 5%(1%) level Trace test indicates 1 cointegrating equation(s) at both 5% and 1% levels 82 Hypothesized No. of CE(s) Eigenvalue Max-Eigen Statistic 5 Percent Critical Value 1 Percent Critical Value None * At most 1 At most 2 At most 3 29.14513 15.52864 9.753767 1.274721 27.07 20.97 14.07 3.76 32.24 25.52 18.63 6.65 0.633957 0.414606 0.285618 0.043004 *(**) denotes rejection of the hypothesis at the 5%(1%) level Max-eigenvalue test indicates 1 cointegrating equation(s) at the 5% level Max-eigenvalue test indicates no cointegration at the 1% level Unrestricted Cointegrating Coefficients (normalized by b'*S11*b=I): LNGRGDP -0.166209 1.310377 0.571609 0.552729 LNFODSE -0.663179 -0.135137 0.160234 -0.422341 LNNOPOP -0.520598 0.203733 -0.789547 -0.938814 LNAGPRO 0.895722 -0.406652 0.558882 -1.034966 Unrestricted Adjustment Coefficients (alpha): D(LNGRGD 0.423081 P) D(LNFODS 1.277566 -0.613179 -0.196882 0.093307 0.864232 -0.619808 0.073974 83 E) D(LNNOPO -0.058166 P) D(LNAGPR -0.482901 O) -0.315746 0.303157 0.172937 -0.171589 -0.274522 0.068414 1 Cointegrating Log Equation(s): likelihood -172.7320 Normalized cointegrating coefficients (std.err. in parentheses) LNGRGDP LNFODSE LNNOPOP LNAGPRO 1.000000 3.990033 3.132187 -5.389132 (0.76487) (1.22720) (1.34270) Adjustment coefficients (std.err. in parentheses) D(LNGRGD -0.070320 P) (0.04024) D(LNFODS -0.212343 E) (0.07116) D(LNNOPO 0.009668 P) (0.03890) D(LNAGPR 0.080262 O) (0.02636) 84 2 Cointegrating Log Equation(s): likelihood -164.9677 Normalized cointegrating coefficients (std.err. in parentheses) LNGRGDP LNFODSE LNNOPOP LNAGPRO 1.000000 0.000000 0.230476 -0.438294 (0.20489) (0.26089) 0.000000 1.000000 0.727240 -1.240801 (0.26172) (0.33326) Adjustment coefficients (std.err. in parentheses) D(LNGRGD -0.873815 -0.197716 P) (0.27159) (0.13916) D(LNFODS 0.920127 -0.964045 E) (0.51300) (0.26286) D(LNNOPO -0.404078 0.081243 P) (0.29663) (0.15199) D(LNAGPR -0.144583 0.343438 O) (0.20406) (0.10456) 3 Cointegrating Log Equation(s): likelihood -160.0908 Normalized cointegrating coefficients (std.err. in parentheses) LNGRGDP LNFODSE LNNOPOP LNAGPRO 85 1.000000 0.000000 0.000000 0.000000 1.000000 0.000000 0.000000 0.000000 1.000000 -0.214388 (0.24913) -0.534292 (0.45258) -0.971494 (0.46705) Adjustment coefficients (std.err. in parentheses) D(LNGRGD -0.986354 -0.229263 -0.189732 P) (0.28997) (0.14013) (0.19491) D(LNFODS 0.565839 -1.063359 0.000343 E) (0.52712) (0.25473) (0.35431) D(LNNOPO -0.230791 0.129819 -0.273404 P) (0.31015) (0.14988) (0.20847) D(LNAGPR -0.301502 0.299450 0.433186 O) (0.20652) (0.09980) (0.13881) 86 AN EVALUATION OF THE VIABLE APPROACHES TO RURAL/COMMUNITY DEVELOPMENT Ugbonna Emma N & Okoro Chijioke N ABSTRACT This paper evaluates rural/community development approaches in Nigeria. It reviewed the role of local government, conventional governments; and cooperative societies in contributing to rural/community economic development. It was observed that the different levels of government intervention programmes are excellent schemes. But, experiences have also shown that for government to effectively implement their development policies in the rural communities, a rural institutional vehicle becomes a sine qua non. This rural institutional vehicle is no other, than an association of people registered with the government known as Cooperative Societies. These cooperatives will of necessity pass through the local government which has the capacity to understand and conduct their local affairs optimally as well as identify their needs and demands than the other tiers of government due to their nearness or proximity to the rural dwellers. Co-operatives as a developmental course is a better option to adopt in sustaining rural development, taking into cognizance its multi-faceted nature and extension capacity. Keywords: Rural/Community, Development, Government, Cooperative Society 87 INTRODUCTION Community development is the process of restructuring the political economy in order to satisfy the material, social and economic needs; as well as the aspirations of the people, and to promote individual and collective incentives to participate in the process of development (UN, 1971). In other words, in community development the people participate in making the decisions that will affect their lives. Community development programmes can either be initiated by the people or the government or both of them coming together to pull their resources together for the good of the community. Thus the people and the government can be classified as partners in progress. Local government has been acknowledged and accepted as the third tier government in Nigerian Federal structure. It is used to designate the effect made by the ruling elite to bring the government closer to the people. This broad motive of local government is to ensure grassroots participation in government and thereby encourage the growth of rural areas (Chukwuemeka, 2002). The role of local government according to Onah (1995) is a border place with a superior capacity to understand and conduct the local affairs of the grassroots. The rationale of this assertion is that local government is the nearest government to the rural dwellers and it has the capacity to identify their needs and demands than the other two tiers of government- Federal and State. Also local government has abundant human resources and when fully mobilized will become valuable instruments for rural development. That the local government has big role to play in the rural development programme is an obvious fact. 88 The questions are: what are the roles? What approaches should local government adopt and the position of cooperatives to these effects. CONCEPT OF DEVELOPMENT Development is not only an economic phenomenon. It embraces more than the financial and material sides of people’s lives. It is a multi-dimensional process involving the total re-organisation and re-orientation of the entire political, social and economic system. It is a systematic concept involving different human institutions and structures and affecting people in diverse ways (Ewuim 2010).In addition to improvement in incomes and output, development typically involves radical changes in institutional, social, economic and administrative structures as well as in popular attitudes, customs and beliefs of the people (Ewuim 2010). Seers (1972), defines development as a process involving the fulfilment of the necessary conditions for the realisation of human personality. Some of the necessary conditions include education and skill (human capital development/capital building), empowerment, welfare programmes and accessible health care system. Katz (1960) citied in Ewuim (2010) considers development as freedom from personal assaults and indignity. He contends that development should ensure: Security against external aggression and freedom and opportunity for self-fulfilment. According to United Nations document, development implies paying attention to capital building. This entails giving attention to what is needed to make the people have the ability, skill and energy to be able to effect change in their environment. In practical terms it means improving 89 education to unlock human potentials, improving infrastructural development to aid economic development and employment of the people at political, economic and social levels. Development envisages the effective utilisation of man, money, machine and materials in such a way that the entire populace will have equal opportunity to meet their basic needs of food, shelter, clothing, education, health, potable water and security, including right to work now and in the future. RURAL/COMMUNITY DEVELOPMENT Okolie cited in (Ewuim 2010) sees community development as a movement to promote better living for the whole community, with the active participation and if possible on the initiative of the community. But if this initiative is not forthcoming, then the use of technique for arousing and stimulating it for an active and enthusiastic response becomes imperative. It includes the whole range of development activities in the districts, whether they are undertaken by government or unofficial bodies. Poston (1966) as cited in Ewuim (2010), views community development as a process of education by which people of all ages and all interests in the community learn to share their thought, their ideas, their participation, their joys and their sorrows and in large measure to mould and share the communal destiny by themselves. It is a process of self discovery by which the people of a community learn to identify and solve their community problems. United Nations (1971), see community development as the utilization under one single programme of approach and technique, which relies upon local communities as units and which attempts to combine outside assistance with organised local self determination and effort, and which correspondingly seeks to stimulate local initiative and leadership as the primary 90 instrument of change. Okolie (2005), defined community development as the process by which the efforts of the people themselves are united with those of government authorities to improve the economic, social and cultural conditions of communities to integrate these communities into the life of the nation and to enable them contribute fully to national progress. APPROACHES TO COMMUNITY DEVELOPMENT Approaches to community development entail those methods and strategies that can be adopted by the government and other agencies in ensuring the development of the rural communities. LOCAL GOVERNMENT APPROACH TO COMMUNITY DEVELOPMENT Ugwu (2000) defined local government as “the third tier level of government created for the purpose of efficient and effective administration of the localities”. Odenigwe (1984), considers local government as “that part of government of a nation or state which deals mainly with matters of concern to the people of a particular place”. The 1976 local government reform takes local government as the government at the local level exercised through representative councils established by law to exercise specific powers within defined areas. In the opinion of the United Nations Division of Public Administration (1982), local government is “a political subdivision of a nation (or in federal system, a third tier) which is constituted by law and has substantial control for local affairs including the powers to impose or to exact labour for prescribed purposes”. The governing body of such an entity is elected or otherwise selected. For the purpose of this work, we define local government as a unit of government established by act of law to 91 administer the functions of government and see to the welfare and interest of the local dwellers under the local government system. THE ROLE OF LOCAL GOVERNMENT IN COMMUNITY DEVELOPMENT The 1976 local government reform states three major objectives which directly form the bulk of the roles it must play in community development. 1. To make appropriate services and development activities responsible to local wishes and initiatives. 2. To mobilise human and material resources through people’s participation in development process. 3. To encourage local initiative and leadership potential. It is incumbent on local government to infuse and employ necessary local traditional institutional and organizational structures like the village heads, district cooperative and town associations into the institutional and organizational arrangements of the higher tiers of government for the achievement of community development objective. This will help in the effective execution of the various programmes initiated and articulated by the bodies in charge in the office of the president at the national level and governor’s at the state level. That is, the community development committee at the local government level should liaise with the higher levels (federal and state) and that of the lower levels (Ewium 2010). Local government is duty bound to mobilize the community for their effective political participation. Okoli (1995) described this role as mobilizing rural power centres for implementation of community development programmes. In this way, the local 92 government provides the ‘fit’ between the programme and institution and organizations for effective execution, and ‘fit’ between the programme and intending beneficiaries. For effective participation by the local populace, there must be a ‘fit’ between the three variables namely; the beneficiaries and the programmes; the beneficiaries and the assisting organisation; and lastly, the programme and the organisation or institution for their implementation. Mobilization which is considered a sine qua non here is defined by Oyedipo (1987) as “the awakening of the consciousness or awareness of the people about their physical, cultural, social, economic and political environment and forces that promote and or inhibit their progress and well being”. Chukwuemeka (2002) affirms that local government role lies in investing in human capital through formal and informal education, skill acquisition and conscientization, social mobilization is necessary for rural development. He also observed that local government should take measures that will ensure the preservation of environmental resources so that bioresources and other socio endowments are preserved to encourage enduring condition for the extraction of natural raw materials for development related activities. Local government should play a leading role in developing local technologies appropriate for rural development since the hallmark of community development is self-reliance. Therefore, local technologies have to be harnessed and applied to the development needs of the rural communities. CONVENTIONAL APPROACHES TO COMMUNITY DEVELOPMENT 93 Aweto (1996), Carl and John (1990) and Oakley and Garforth (1985) suggested the following principles to implement rural development programmes: (i) Access: Try to ensure that the programme and its benefit can reach those in needs and beware of consequences if some farmers have access to the programme which others do not. (ii) Independence: Ensure a programme that helps and supports a farmer but does not make him or his livelihood dependent upon the programme. (iii) Sustainability: Ensure that programmes plan and solutions which are relevant to the local economies, social and administrative situation. Short term solutions may yield quick results but long term programmes that are suitable to the local government have greater success. (iv) Going forward: Technological aspects of rural development programmes should help the farmers to take the next step in his development and not demand that he takes a huge technological leap. It is better to secure a modest advance which can be sustained than suggest a substantial advance which is beyond the ability of most farmers. (v) Participation: Always try to consult the best people, seek their ideas and involve them as much as possible in the programmes. (vi) Effectiveness: A programme should be based on the effective use of local resources and not necessarily on their most efficient use. While efficiency is important, their requirements are often unrealistic. Akpovire (1994), in the same vein presented seven methods at the disposal of Nigeria government in developing the rural communities. These strategies include: 94 a) Matching grant: In this approach, government and the people go into a working partnership to carry out development ventures. In it, the communities may embark on self-help project, while the government will provide technical, financial and managerial assistance wherever the projects are being carried out. In other words, through the matching grant approach, government provides a percentage of the cost of the project being carried out by the people to augment the funds at the disposal of the communities. The communities or people are expected to identify their needs, arrange them in order of priority and work out the cost of implementing the projects. b) Directive approach: Through this approach government or its agency uses the top-down strategy of development to carry out development projects in the communities. In this approach, government or its agency acts as a sole judge for the people on what shall be done for them or what shall not be done. Government supplies the staff, equipment, materials and programmes it considers necessary and appropriate to meet the needs of the people. c) Non-Directory Approach: The approach is often known as, ‘the inner approach’. In it, the people themselves are allowed by the government to decide their areas of felt need. The people plan, organise and execute their projects without external or government interferences. Therefore, in this method of community development, the direction for progress is internally determined by the people themselves. d) Integrative Approach: This approach views community development as a comprehensive programme, which should include the provisions of the necessary economic, social institutional and political conditions as well as coordinating and managing human and material resources for development. In 95 this approach, development is usually planned and executed through a central body or agency. In other words, the goals of development is centrally planned and executed. e) Team and Multiple Approaches: This approach deals with technical application of the ideas gained in the integrated approach, since it is based on the realisation that the goals of development are both material and non-material, and as such requires the participation of more than just a group of experts. Therefore, the team approach can be described as that in which a team providing a variety of services are brought together to deal with some of the problems which emerged, as alternatives are made to the community socio-economic cum political system. f) Electric Approach: This approach was developed by the National Youth Service Corp (NYSC). Its strength lies on its continual adoption to changing circumstances. This approach is a form of contingency approach to the development because it emphasizes continuous change and adaptation to development challenges depending on prevailing circumstances and situation. This approach essentially stresses the arguable fact that there is no best approach to community development. Each approach should be used depending on the prevailing situation at any given point in time. g) Comprehensive (holistic) Approach: In this approach, community development is designed in such a way as to deal with the various segments/sectors of the community as a whole for the overall well being of the people. This approach is based on the premise that community problems are interrelated or to a varying degree interdependent. Hence, the solutions of the other, and the solution will proceed more effectively as a cooperation, and co-ordinated activity. 96 In addition to the above six approaches to community development, Idode (1989) identified three major approaches to community development, which includes the following: 1) The Extension Approach: in this approach, government through its development agencies and ministries directly teach the community people new and improved methods and strategies of doing things such as farming, health care delivery, etc. the importance of using this method of community development is to make the people part and parcel of government development projects. 2) The Project Approach: through this approach government enhances and improves the socio-economic well being of the people by establishing commercial and economic ventures such as cottage industries, artisan workshop and agricultural produce processing centres. These economic ventures are established by the government and they provide employment for the rural person, which in turn enhances their economy through improved income. 3) The Service Approach: through this mechanism, the people initiate self-help development projects in their area without the endless wait for government intervention. The people have often initiated some self-help projects like building of boreholes, maternity homes and dispensary centres and provision of transformers for power supply. CO-OPERATIVE APPROACH TO RURAL DEVELOPMENT Berko (1989) defines co-operatives as an association of persons, with variable membership and variable capital who have pooled themselves and their resources together on mutual or self help basis to form a business enterprise which seeks to solve the 97 socio-economic problem or problems of these members by directly providing goods and services to them in their capacity as either the owner /customer or owner/employee of the cooperative enterprise. Conference of International Labour Organization (1966) defines co-operative as an association of persons who have voluntarily joined to achieve a common end, through the formation of a democratically controlled organization, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in which members actively participate. International Co-operative Alliance I.C.A. (1995) defines co-operative as an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointlyowned and democratic controlled enterprise. Co-operative is an offshoot of industrial revolution which took place in England (1750-1850). This industrial revolution was brought about by the invention of the steam engine, various spinning machines, the power loom and a whole series of other mechanical devices. These machines which were very expensive and hence could be bought by only the big capitalists that altered the whole previous mode of production and ousted the former independent workers, because machines turned out cheaper and better commodities than could the workers with their inefficient manual spinning-wheels and handlooms (Uchendu 1998). The former independent workers had to migrate to the new industrial centre in search of employment. They became dependent on employers for meagre wages, shelter and consumer items which turned to paying them in kind. Women and child labour which was far cheaper than adult labour was introduced. Factories were soul destroying prison 98 house, ugly looking, poorly ventilated and lit and the environment very unhygienic, the workers were driven to work hard for longer hours because there was stiff competition between the factory owners. Workers were poorly paid and any expenses which did not directly increase the yield or output was avoided. Workers were ill-treated, the environment was polluted, exploitation was very high, cut throat competition and unfair laws were predominant. Special privileges were given to a few people and immorality was the order of the day. Towns were over-crowded, dirty, unplanned, devoid of amenities, ugly, depressive and characterized by smoke and slums (Uchendu 1998). The above scenario is an epitome of rural/community dwellers in Nigeria in which government of the past and present in its frantic effort in integrating the rural dwellers into the mainstream of national economic developmental plan, have initiated various programmes such as Agricultural Development Programmes (ADP), Green Revolution, Operation feed the Nation (OFN),National Poverty Eradication Programme (NAPEP),Better Life for Rural Women, Niger Basin Water Commission and the host of them, but all efforts seem abortive as they failed to integrate, transform and improve lives of rural dwellers. THE ROLE OF CO-OPERATIVES TO COMMUNITY DEVELOPMENT Given the integrated nature of development, the roles of cooperatives cannot be over-emphasized. Co-operatives as a weapon of last resort has proven and contributed significantly towards the integration of rural dwellers into the mainstream of national development. Aweto (1996), Ijere (1992) and Olaide, 99 Olajumwor S. et al (1980) identified the following advantages of providing agricultural credit through the co-operatives: (a) Agricultural co-operatives, being formal and peopleoriented organizations are in the vantage position through which they can reach the farmers. (b) Agricultural co-operatives obtain loans from commercial banks for on-lending to farmer members. This reduces the administrative cost of processing multiplicity of small loans to individual farmers. (c) Agricultural co-operative society can take up insurance policy with the Nigerian Insurance Company to reduce risk envisaged by commercial banks and assures them of safety of farmer’s business and investment. Insurance policy is an acceptable collateral security to the bank. (d) The society is also in a position to obtain complete and submit member application forms collectively thus making access to credit relatively easy and convenient for illiterate farmers. (e) Agricultural co-operative society’s credit has educational value. Credit alone is of little use to the farmer if it is not accompanied by complementary services which will help the farmer use loan productively and avoid unnecessary debts. Thus, the co-operative societies help to provide required inputs of production and help disseminate information on improved agricultural practices amongst members. (f) Loan management skill training can also be given to the members at a relatively low cost through the co-operative society. (g) The administration of loan through co-operatives is cheaper and repayment is easier. 100 In considering the National Agricultural Land Development Authority (NALDA) and The Fourth National Development Plan (1981-1985), Aweto (1996), holds that specific roles of cooperatives in Agricultural Development Programmes (ADPs) includes the following: (i) Co-operatives mobilize farmers into collective units in readiness for the agricultural development programmes’/projects’ activities geared towards enhancing farmer’s productivity, overall production and increased income. (ii) Co-operatives build the capacity of participants to have effective working relationship in association that are free and democratic for the achievement of the community and individual desired security and development. (iii) Co-operatives are used as conduit between rural small scale farmers and the agricultural development programmes/projects. (iv) Co-operatives facilitate the transfer of useful agricultural information and modern technology to farmers. Using cooperatives is less costly and most convenient compared with individual farmers. (v) Distribution of agricultural inputs to small scale farmers is most effective through the use of co-operatives. (vi) Co-operatives participation on small scale lending schemes ensures easy and quick access of peasants to loans, effective loan management and recovery. (vii) The group action of co-operative society ensures rapid adoption of innovation by farmers. (viii) Co-operatives assist in organizing small scale farmers to cope with expected increase in agricultural output consequent upon the projects’ effect. They facilitate storage, processing and marketing of products. 101 (ix) Co-operatives encourage thrift among members, and from capital mobilized, loans are disbursed to members. (x) Co-operatives facilitate training of farmers participating in the programmes/projects and develop management capacities. (xi) Co-operatives ensure sustainability of the activities of the agricultural development projects and facilitate attainments of the development objectives. CONCLUSION AND RECOMMENDATIONS It is a known fact that government is a bad producer. This is to say that, government have good policies but the problem is in its implementation. The recent review of privatization policy is the aftermath of the past scenario. Therefore, the only way to privatize rural developmental policies is through the adoption of co-operative societies. It therefore, suffices to recommend the cooperative approach since cooperatives provide a better forum through which development agencies can channel inputs required for implementation of the integrated rural development programme to the rural dwellers. Family planning materials, storage and processing equipment etc are distributed through cooperatives. In situations where some of the rural dwellers are indifferent to the programme due to lack of information, cooperatives may combine the role of instruction and that of stimulating members of the community to participate in the programmes. Agricultural co-operatives as rural institutions are part of the overall plan to raise the level of survival and economic consciousness of the rural dwellers. Thus, cooperatives are an integral part of the integrated rural development scheme. Co-operatives in its multi-faceted nature are best suited to execute rural implementation and developmental programmes in Nigeria. 102 REFERENCES Berko, S.Y. (1989). Fundamentals of Co-operation. Unpublished Mimeograph ASUTECH Enugu. Aweto, R.A. (1996) Agricultural Co-operatives. Carl, K. Eicher and John, M. Staaz (1990) Agricultural Development in the Third World. Second Edition. Chukwuemeka, E. (2002) The New Federal Government Guideline on the Application of Civil Servants Reforms in the Local Government System, Lagos: Akamu Publishers Ltd. Ewuim, Ngozi C. (2010) Theory and Practice of Community and Rural Development. Nimo: Rex Charles and Patrick Ltd. Finer, J. [1989]. State and their Local Government in Africa. London: Cambridge Press. Idode, J.B. (1989). Rural Development and Bureaucracy in Nigeria. Ikeja: Longman Nigeria Limited. Ijere, M.O. (1992). Prospects of Nigerian Co-operatives. Enugu: Acena Publishers. National Agricultural Land Development Authority (NALDA) Information Leaflet. Nwobi, T. U. (2007) Rural Development: Theories and Strategies. Nimo: Rex Charles and Patrick Limited. Oakley, P. and Garforth, C. (1985) Guide to Extension Training. 103 Odenigwe (1984) Comparative Local Harmondsworth: Penguin Books Ltd Government, Okolie, F.C. (1995) Theory and Practice of Local Government in Nigeria. Ibadan: Oxford University Press. Okoli, M.U. (2005) Local Government Administrative System; An Introductory and Comparative Approach. Onitsha: Abbot Publishers Ltd. Olaide, Olajumwor S. etal (1980) Problems and Prospects in Integrated Rural Development. Onah, R.C. (1995) Political Authority and the Nigeria Civil Service. Enugu: Fourth Dimension. Oyedipo. (1987) The Financial Control and Accountability in Local Government Councils. Unpublished Seminar Paper. Seers, D. (1972) “What Are We Trying To Measure”; Journal of Development Studies. Vol. 8 No. 3. Ugwu, N. (2000) Local Government Administration in Nigeria. Onitsha: Abbot Publishers Ltd. The Fourth National Development Plan (1981-1985) Planning Office, Federal Ministry of Budget and Planning. Nigeria Uchendu S. O (1998) Fundamentals of Co-operative Business Enterprise. Rejoint Communication Ltd. 65 Adelabu Street, Uwani-Enugu, Enugu State, Nigeria. 104 United Nations Divisions of Public Administration (1982). United Nations (1971), “Methods of Community Development”. Community Development Journal, Vol. 6 No. 3. 105 ANALYSIS OF GUERRILLA AND TRADITIONAL MARKETING INTERFACE IN IMPROVING THE PRODUCTIVITY OF ORGANIZATIONAL MARKETING IN SMALL TO MEDUIM SIZE ENTERPRISES (SMEs) IN OWERRI BY Anukam, Amaobi Isaac Imo State Polytechnic, Umuagwo ABSTRACT This research aims at exploring and analyzing the integration of guerrilla and traditional marketing in small to medium scale enterprises in Nigeria with a case study of Marketing of Hotel Services in Owerri Imo State, Nigeria. For gathering data, two questionnaires were used for the integration of guerrilla marketing and the traditional marketing and productivity of organizational marketing. The research hypotheses were tested by correlation test, and all the hypotheses were verified. The sequences of priorities in productivity of organizational marketing were new methods of advertisement. There was a significant relationship between the integration of guerrilla marketing and the traditional marketing in the improvement of productivity of organizational marketing in the enterprises studied. Also, it was concluded that new communication technologies item with mean of 1.93, innovation and problem solving techniques with mean of 2.08, marketing budget item with mean 2.89 and new methods of advertisement with mean of 3.12 were first to fourth priority, respectively. Findings show that guerrilla marketing is complementary to traditional marketing. Hence will recommend GM as a paradigm and for 106 hotel enterprises in Owerri, guerrilla marketing is the surviving technique to approach the unstable hostile business environment that they operate in. 1.0 INTRODUCTION Marketing is essential for the organic growth of a company. Not surprising, firms spend millions of naira on marketing. Given that these consist of investments, marketing managers have the responsibility to optimally allocate their resources and demonstrate that these investments generate appropriate returns for their firms. Levinson, (1983) made the term “guerrilla marketing” known as a philosophy for small and start-up companies to successfully market their business with a small amount of money. He based the success of a marketing strategy on the use of non-traditional marketing channels, customer proximity, insistency and patience. following the technological developments today and its complementary change in the advertising market, guerrilla marketing has developed into a marketing form that is mostly used for promotion and retention of customers’ attention and interest. New forms such as “ambush” and “viral” marketing have evolved (Druing & Fahrenholz, 2008). Guerilla marketing distinguishes itself from other promotion tools by its surprise effect and it has become a very popular marketing strategy in current times. CasadesusMasanell, et al, (2007), in their researches from strategy to business models and to tactics state that the business model design involves assessments with respect to determining: (i) The identity of the market segments to be targeted; (ii) The benefit the enterprise will deliver to the customer; (iii) The technologies and features that are to be embedded in the product and service; 107 (iv) How the revenue and cost structure of a business is to be designed (and if necessary, redesigned) to meet customer needs; (v) The way in which technologies are to be assembled and offered to the customers; (vi) The mechanisms and manner by which the value is to be captured, and how the competitive advantage can be sustained. These issues are all interrelated. They lie at the core of the fundamental questions asked by business strategist, which is “how does one build a sustainable competitive advantage?” Integration of guerrilla marketing and traditional marketing is approached not as a set of tools (a technology) for facilitating transactions or responding to change, but as a vehicle for fundamentally redefining products and markets in ways that produce sustainable competitive advantage for enterprises, (levinson, 2008). About new methods of advertisement, Godes and Mayzlin (2007) report several other examples where companies promoted their products and services through wordof-mouth (WOM) marketing. Kumar, et al (2007) used a survey method to assess the value of word-of-mouth and referral. Zubcsek and Sarvary (2009), hold that direct marketing (DM) which involves sending promotional messages to individual customers is increasingly used by marketers as a result of the explosive growth of customers’ database. Most current methods used to calculate optimal budgets for such DM campaigns consider customers in isolation and ignore the word-of-mouth communication (WOM). The current traditional marketing methods however, generally ignore word-of-mouth communication between customers (Vilanueva, et al, 2008). 108 Although marketers have always known that WOM has a very powerful influence on customer decisions (Bass, 1969; Herr, et al, 1991; Van den Bulte & Joshi, 2007), until recently, they did not have much information about the individual communication patterns of consumers. In this investigation, the role of integrating guerrilla and traditional marketing in improving the productivity of organizational marketing in enterprises in Nigeria is discussed with a case study of hotel business in Owerri considering the number of hotels now in the area. Theoretical Framework The term: “Guerrilla” first appeared during the war of independence in Spain and Portugal at the beginning of the 19th century. It is a Spanish expression which can be translated as “battle”. Guerrilla stands for a combat operation that was used by smaller groups that stood against a massive military force, (Levinson, 1998). The term and the connected operations became famous through Ernesto Che Guevara Lynch la Serna (1928-1967), best known as Che Guevara, who used and defined this military tactics. He belongs to a small militia group which wanted to put their political concept through. They were clearly in the weaker position and their only chance to achieve a successful revolution in Cuba was to fight the national military. Since Che Guevara and his followers did not possess as many resources, such as weapons, money, or fighters as their opponents, they based their operations on the surprise effect and on acts of sabotage. Due to their size, they had the advantage of being more flexible, having a quicker co-ordination and knowledge of the territory better. The use of unconventional weapons and activities helped them to destabilize their rivals and led them to their final success. 109 During the 1960’s, the United States of America faced major difficulties in the Vietnam War. Even though Vietnam was theoretically much weaker, the USA Army was not able to bring the Vietnamese down. Especially the Vietcong force was unbeatable, because they used the Guerrilla tactics that destabilized the American forces constantly. The Vietcong’s operations were similar to Che Guevara’s activities. They also used the surprise effect, were much more flexible than their enemies fought on Vietnamese territory, and used unusual means. This was the first time Americans got to know the principles of Guerrilla, (Levinson, 2003, Levinson & Lauterslager, 2005). Guerrilla marketing is characterized by surprise effect, diffusion effect and low-cost effect. It is flexible in application and advocates for effective resources leverage. This phenomenon is what this study sets out to provide empirical evidence for. The name Guerrilla originally describes a group that uses a violent approach to achieve the implementation of their belief and ideology. Then opponents are often a tremendous force consisting of more people and resources such as weapons or money. The Guerrilla fighter’s only advantage is the fact that they only know where and when they will strike. The original approach of Guerrilla marketing is as an alternative marketing strategy that suits small and medium sizes enterprises to act like guerrilla fighters have done in the past: hit valuable targets of large enemies by taking them by surprise. The unexpected and unusual guerrilla marketing campaigns help smaller companies to successfully reach their target group, even 110 though their bigger market competitors had a large marketing budget, more experience, and a better spread to advance a market by using traditional strategies (During & Fahrenholz, 2008). Fahrenholz (2008) posits that many small and mediumsized enterprises started with Guerrilla marketing and established their business creatively. Through constant growth rates they have the means to also afford traditional marketing tools to gain more and more market share, and continue to attack the market leaders. Summary of the Guerrilla Marketing Principles i. Find a Segment Small Enough to Defend: Try to pick a segment small enough so that you can become the leader. ABC Transport is a true guerrilla. They concentrate on a small market segment and are its leader. Small is beautiful. ii. Psychological warfare: A guerrilla can take advantage of its smallness to make quick decisions. This can be a precious asset when competing with the big companies. iii. Flexibility and restlessness: Don’t hesitate to abandon a position or a product if the battle turns against you. A guerrilla doesn’t have the resources to waste on a lost cause. He should be quick to give up and move on in the small company, one person’s hunch can be enough to launch a new product. iv. It has to be excitement and humorous. Make your customers remember you with smiling faces, that they will always desire to buy from you. Guerilla Marketing Vs. Traditional Marketing In order to understand the principles of guerrilla marketing performance, the significant differences between traditional 111 marketing and guerilla marketing have to be identified. Referring to Levinson (2006), conventional advertising require a certain capital addressed for promotion plan while time, energy, imagination and knowledge assets are a primary investment in Guerrilla approach. Big businesses with correspondingly substantial budgets are potential users of traditional marketing which measure its success only by sales and number of responses or store traffic. Gallagher, (2004) explains an explicit difference as: “what matters in guerrilla marketing is, rather than what the firm does to be successful; it is what it does to differentiate itself from its rivals and its success in reaching broader potential customers”. According to Levinson (2006), therein is the summary of the main differences between these two ways of marketing in the Table 1 below: 1: Differences between Traditional and Guerrilla Marketing TRADITIONAL MARKETING Primary investment is money Model for big business Success measured by sales What can I take from the customer? Mass media usage (direct mail, radio, television, newspapers) Advertising works How much money do you have at the end? GUERRILLA MARKETING Primary investment is time, effort and creativity Focus on small business Success measured by profits What can I give to the customer? Marketing weapons are numerous and most are free Types of non-traditional marketing succeed How many relationships do you have at the end? (Source: Levinson, 2006) Around the globe marketing experts, researchers, and academics are eagerly trying to find an all embracing description of 112 Guerrilla Marketing (GM), since no official definition of the term exist so far. Many explanations have thus been created and even though they vary in their wordings, they have the following characteristics of Guerrilla Marketing in common: creative, unconventional, surprising and efficient, (Levinson & McLaughlin, 2003, Levinson, 1998). Guerrilla marketing is a marketing strategy in today’s marketplace, predominantly used for the marketing mix “p” promotion. It is a form of marketing which involves the consumer in the advertising experience. Guerrilla marketing campaigns display creative ideas dynamically with unconventional methods at places where advertising would be least expected. The aim is to irritate, fascinate, and animate the customer/consumer. The surprise–effect belongs to the root of the philosophy (During & Fahnenholz, 2008). The use of the unconventional marketing approaches was something that is previously associated with small enterprises due to their limited budget; they had to find new ways. Nowadays when the competition is harsh, the trend goes towards large advertisers who also adopted the approach, since the positive aspects are more visible and the need for finding new ways of reaching the customer has increased (Belch & Belch, 2004). Guerrilla marketing, as the name implies, gives an indication of controversy and warfare, since the name is associated with military tactics, but it should not be associated with a bloody battleground. It is more of a strategy that one uses in order to conquer a market through a well planned approach in a smaller scale. Enterprises use warfare to fight on the battleground of 113 today marketplace, which is the consumers’ mind-where words and pictures are the weapons used and where the ownermanager of every enterprise acts as a general, (Garsombke, 1987). Levinson (1984), claims that all kinds of innovative and eyecatching advertisements belong to the concept of guerrilla marketing. Accordingly, guerrilla marketing is described as being fancy, atypical, unusual, original, provoking, flexible, dynamic, innovative, creative, and humorous. Ries and Trout (1986), for example, recommend to marketers to save costs by identifying market niches, creating a flat organizational structure and acting highly flexible. Despite different vistas on the phenomenon, all the definition of guerrilla marketing agree that the concept provides a solution on how to succeed in the competition for consumers’ attention in advertising campaigns. Egan, (2007), McAllister, and Turow, (2002) posit that Guerrilla Marketing is an umbrella terms that covers the various innovative approaches that marketers adopt in the marketplace to gain market-share and profit, namely: renegade marketing, covert marketing, diffusion marketing, under-the-radar marketing or vanguard marketing. Guerrilla marketing is up to date a marketing strategy characterized by surprise-effect, diffusion-effect and low cost, using the instruments of flexibility, buzz marketing, viral marketing, sensation marketing, ambush marketing, ambient marketing and other related tools to gain advantage over competitors who are stronger in a tough and harsh economy. It is a dynamic, flexible, restless and provocative approach to marketing and in some cases unconventional and controversial without offence to the law and customers. 114 2.2 “Guerrilla Enters Marketing” Conventional marketing practices and textbooks do not accommodate most of the characteristics of Guerrilla marketing. However, in tough and harsh economy, marketers began to improvise and search for other means of survival that does not infringe on others. It is under this condition of toughness that American marketing experts started looking for new approaches to gain the attention of customers. The consumers’ behavior had changed and businesses had to come up with offers that fit their consumers’ needs and not only their own. Consequently marketing experts had to find realizable concepts for businesses with limited resources. The only promising way was to use an untraditional marketing approach that included attention and attack strategies in order to gain as much attention as possible and to weaken competitors considerably. Guerrilla philosophy was found to accommodate these desires, (Schulte, 2007). 2.3 The Philosophy of Guerrilla Marketing Levinson (1983), defined the root of the idea in his book Guerrilla Marketing, his publication provided not only an explanation of the essential marketing idea, but also a philosophy for small business owners who wanted to follow the Guerrilla marketing idea. He introduced new ways of advertising and presenting a business well with small budget, and based the success of marketing strategy on the use of nontraditional marketing channels, customer proximity, insistence and patience. A company should create as many points of contact with customers and prospects as possible in order to stay in their memory. Conrad Levinson is today the father of “Guerrilla Marketing” as his book has been translated into more than 40 languages. 115 Like Levinson, Trout and Ries believed that Guerrilla marketing is best suited for small and medium-size enterprises. Trout pointed out that the market size also has to be manageable with the limited and available resources. Therefore they suggested specializing and investing in niche product and/or market niche. Theirs is that small and medium enterprises should adopt niche approach which will allow flexibility and change, surprise and diffusion at low cost. Kotler, (1990) suggests that Guerrilla marketing should be adopted by market challengers that try to increase their own profitability by gaining more market share from other enterprises in the same industry. A competitive advantage over the challenged firm is the foundation for a good strategy but also involves high risks, especially when the potential gain is high. Kotler, et al. (2005), argue that many smaller financially weaker companies are then using an aggressive guerrilla attack. Such a campaign can even be a tool to fight the current market leader. Unlike Levinson (1998), Ries, Trout (1983), and Kotler (1990) believe that the main purpose of guerrilla marketing is to destabilize the opponent or best to destroy the competitors with the help of attrition tactics. From the views of these guerrilla marketing philosophers, Guerrilla marketing is deeply understood and the principles made clearer for the study. Guerrilla marketing is not a battle or physical combat, but a psychological battle that is fought and won in the minds of customers and consumers, partners and competitors through the segmentation of the population to serve, the targeting strategies adopted that result in the positioning of the firm’s products and services in the mind of the customers and consumers for patronage. 116 Druing and Fahrenholz (2008) found in their research result that financially strong companies use guerrilla marketing as a complementary tool to present the brand in a multimodal way. Smaller firms can make use of the cost-effective strategy to get the spotlight on their brand. Good co-operation with, for instance, the public relations department is essential to increase the guerrilla marketing effect enormously. They concluded in their research that guerrilla marketing would blend with the customers by finding ways to surprise them and interest them by putting the idea in the forefront, not the brand. The evolved guerrilla marketing form is now used by companies of all sizes. Global players such as BMW use it, and start-up companies do so to create brand awareness, (Levinson, 2008). Many small and medium sized companies started with guerrilla marketing and established their businesses lucratively. Through constant growth rates, they have the means to also afford traditional marketing tools to gain more and more market share, which enables them to compete with the market leaders. Wensen, (2008) asserts that one can win the battle for the consumers’ attention by being smarter and more creative than his opponent, instead of spending more money for TV commercials than his competitor does. His definition of guerrilla marketing is a broad one and an unexpected brand program through alternative media. Guerrilla marketing includes, for example, viral marketing, ambush marketing, buzz marketing and also events, but guerrilla marketing is far more than the definition. It is a mentality too, because the mentality of thinking is outside the box and thinking for solutions for communications problems in a broader way, instead of thinking in terms of just TV commercials. Traditional advertising on TV, 117 radio, print and even traditional outdoor advertising is not what is meant by guerrilla marketing. Guerrilla marketing is a way of thinking, (Gallagher, 2004). Hypotheses i. There is a significant relationship between the integration of guerrilla and traditional marketing and the improvement of productivity of organizational marketing in SMEs in Nigeria. Price Place Product Promotion People Small budget New communication technologies + Innovation and problem solving techniques Perish-ability Process New methods of advertisement Politics Interface of guerrilla marketing and traditional marketing Figure1. Interface of Guerrilla Marketing and Traditional Marketing ii. There is a significant relationship between new methods of advertisement and the improvement of productivity of organizational marketing in Nigeria enterprises 118 iii. iv. v. There is a significant relationship between using innovation and problem solving techniques and improvement of productivity of organizational marketing in Nigerian enterprises There is a significant relationship between using new communication techniques and improvement of effectiveness of organizational marketing in Nigerian enterprises. There is a significant relationship between decreasing of marketing budget and improvement of effectiveness of organizational marketing in Nigeria enterprises. 3.0 RESEARCH METHODOLOGY This study applied the survey and descriptive research method; it used the correlation method to determine the relation between integration of guerrilla and traditional marketing and the improvement of organizational productivity in Nigerian enterprises. Consequently, two types of questionnaires were designed and distributed. One questionnaire was used for productivity of organizational marketing, while the other was used for integration of guerrilla marketing and traditional marketing. For the evaluation of organizational productivity 15 questions were stated, while for integration of guerilla marketing and traditional marketing, 35 questions were stated. Time scope of the data collection was from January to March 2013. For reliability of the research, the Cronbach’s alpha coefficient was used and the results of the variables reliability are consistent with literatures (Levinson, 1984, 2008, Garsombke, 1987) that the integration of guerrilla and traditional marketing in the marketplace has significant impact on high productivity in marketing organizations both in terms of 119 market share and profitability. Also, the study calculated the Cronbach’s alpha coefficient for all the questions in this research and it resulted to 0.846. If this number is higher than 0.7, then the reliability of the research is verified. Based on the research hypotheses, it can be stated that independent variables are new methods of advertisement, innovation and problem solving techniques, new communication technologies, marketing budget and dependent variables which is the productivity of organizational marketing. Also, the relation between integration of guerrilla marketing and traditional marketing with new methods of communication technologies and marketing budget are explored and analyzed. 120 Marketing budget vs leverage management New communicating technologies vs promotion Interface of guerrilla marketing and traditional marketing Productivity of organizational marketing Innovation and problem solving techniques vs products & price New methods of advertisement vs promotion mix Figure 2: A Conceptual model (source: Author work, 2013). 3.1 Population and Sample The target population is hotels in Owerri Municipal. The samples were selected from the target population. Owerri is the capital of Imo State and is the eastern heartland. The hotels provide lodging, food, rental, events management and the related services. They have weathered series of storms and related business fluctuations, and the approaches or techniques adopted are worth assessing to determine the extent of use. 121 As a result, the numbers of samples were 70, stratified random sampling was used. For determination of the sample size, the following formula was used: N = (1-r2)Z2 r2 d2 Because of n= number of sample and α = 0.05, then Z2 (a/2) equals (1.96)2. Based on the data of initial sample, r equals 0.76 and degree of freedom equals 0.2. Therefore, after substitution of digits in the given formula, the number of samples gained was 70 and with the thought of raising the validity of these questionnaires, and possibly faulty ones among the questionnaires which will be returned, the number was raised to 90 and the questionnaires were done. RESEARCH FINDINGS Data descriptive analysis The number of samples was 70 managers and all of them were male of middle age. For normality testing of variables, the Kolmogrov – Smirnov test was used. The test results are shown to be consistent with literatures, (Asika & Osuagwu 1997, Deacon, et al, 1999, Gibb, 1990, Ramon, et al, 2007, Masanell, et al, 2009). By Pearson’s correlation coefficient, the relation among new methods of advertisement, new communication technologies, innovation and problem solving techniques, and marketing budget are verified. Due to the fact that the error level (0.000) is lower than the given error level (0.05), H0 based on equality of variables priorities is rejected. Thus, the result of Friedman test shows new communication technologies item with mean 1.99 in the first priority, the innovation and problem solving techniques with mean of 2.04 in the second priority, marketing budget item with a mean of 2.87 in the third priority 122 and new methods of advertisement item with mean 3.10 in the fourth priority of productivity of organizational marketing. CONCLUSIONS The research shows that there is a relationship between the integration of guerrilla marketing and the improvement of productivity of organizational marketing in Nigeria enterprises. There is a significant relation between new methods of advertisement and productivity of organizational marketing. Therefore, the first secondary hypothesis is verified. There is a significant relationship between innovation and problem solving techniques and productivity of organizational marketing. Therefore, the second secondary hypothesis is verified. There is a significant relationship between new communication technologies and productivity of organizational marketing. Therefore, the third secondary hypothesis is verified. There is a significant relationship between marketing budget and productivity of organizational marketing, the forth secondary hypothesis is also verified. The mean of productivity of organizational marketing measurement shows sequentially new communication technologies item, marketing budget item, innovation and problem solving techniques items, and then the last new methods of advertisement item which influence the productivity of organizational marketing in SMEs in Owerri. Recommendations The author observes that the views on guerrilla marketing that come from the empirical findings in studying the marketing of hotels services in Owerri, are very similar to the theoretical frameworks on the phenomenon in terms of definitions. Guerrilla marketing has a shorter frame of time in planning and execution, unlike traditional marketing. It can take place within 123 a shortest time possible, (Levinson, 2003). The researcher is of the opinion that more and more hotel marketers should start using guerrilla marketing if they want to survive the harsh and tough economic trends in Owerri, Imo State Nigeria. According to Ives (2009), it is believed that more and more marketers will start to use guerrilla weapons since the end customer have proven to be harder and harder to reach. Consequently, the empirical findings in this study confirm the same that there is a problem today with traditional marketing strategies; the public are fed-up, basically with repetitive advertising. Guerrilla marketing orientation will assist every marketer solve the problem of customers blocking of marketing programmes. Levinson (1998) opined that a good way to reach the end customer without being blocked is to target the segment, using target marketing. The study has proven that guerrilla marketing is a more targeted approach than conventional marketing, which implies that it is in a smaller scale. However a word of caution is that the enterprise operators should be mindful of ethical issues so as not to offend, otherwise all effort to market can backfire. They should be careful not to infringe on the law, in order not to commence a programme that will be counter-productive. Every guerrilla marketer must know the target audience. It is a classical start of every marketing campaign. 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