IMPACT OF ASSET MEASUREMENT AND MANAGEMENT ON CORPORATE PERFORMANCE”. (A CASE STUDY OF FIRST BANK PLC OKPARA AVENUE ENUGU)
ABSTRACT
My project research work is on the impact of asset measurement and management on corporate performance with particular reference to First Bank Plc Okpara Avenue Enugu. These are the area that was use while carrying out this research work. The first chapter is going to be the introductory part of the research work. This chapter was contain the background of the study, statement of problems, research question etc. In the proposed study, hypotheses were formulated to give direction of the study. Data for the study would be sourced from two main sources. Primary data: Questionnaires and oral interviews was used to collect information respondents Secondary data: Journals, magazine and other relevant materials relating to the area of my investigation was review Extensive literature review was be carried out on direct literature and indirect literature on books, journals and past works. I was personally administering the questionnaire on the respondents comprising private individuals and the staff and customers of First Bank Plc Okpara Avenue Enugu. The research instrument of the study was oral interview and questionnaire. The questionnaire was structural as to contain both close and open ended question. Simply tables, pie-charts and percentages were used in treatment of data while chi-square was used to test the hypothesis formulated. Based on the findings, and conclusions were drawn and recommendations was also be made in the last chapter of the work which is the fifth chapter.
TABLE OF CONTENTS
Title page… … … … … … … … … … i
Certification page … … … … … … … … ii
Approval page… … … … … … … … … iii
Dedication … … … … … … … … … iv
Acknowledgement … … … … … … … … v
Abstract … … … … … … … … … … vi
Table of contents … … … … … … … … vii
CHAPTER ONE
Introduction
1.1 Background of the study… … … … … … 1
1.2 Statement of the problem … … … … … 6
1.3 Objective of the study … … … … … … 10
1.4 Research Question … … … … … … … 11
1.5 Hypothesis … … … … … … … … 12
1.6 Significance of the study… … … … … … 12
1.7 Scope and Limitations of the study … … … … 13
1.8 Definition of term … … … … … … … 14
Reference… … … … … … … … … 15
CHAPTER TWO
Literature Review
2.1 Asset Measurement Uncertainty and Credit
Term-Structure … … … … … … … 16
2.2 Evaluating Intangible Assets:
The Measurement of R&D Performance … … … 21
2.3 Performance Measurement of Technological
Activities… … … … … … … … … 24
2.4 The Framework for R&D Performance Measurement …34
2.5 Intangible Asset Measurement … … … … … 47
2.6 Problems of Asset Measurement and Management … 50
2.6.1 Miscommunication Among Departments … … 51
2.6.2 Incompetence to Manage Assets … … … 52
2.6.3 Lack of Technology Demanded by the Company … 52
2.6.4 Lack of Support … … … … … … 53
2.6.5 No Balance in Asset Elements… … … … 53
2.6.6 Too Little Risks taken for Growth … … … 54
2.7 Asset Management in the Utilities Industry … 54
References … … … … … … … … 58
CHAPTER THREE
Researcher Methodology
3.1 Research Design … … … … … … … 59
3.2 Sources of Data … … … … … … … 60
3.3 Population and Sample Size Determination … … 62
3.4 Methods of investigation… … … … … … 64
References … … … … … … … … … 67
CHAPTER FOUR
4.1 Analysis of Data ... ... ... ... ... ... ... 68
4.2 Test of Hypothesis ... ... ... ... ... ... ... 74
CHAPTER FIVE
Summary of Findings, Conclusions and Recommendations
5.1 Summary of the Findings … … … … … … 77
5.2 Conclusion … … … … … … … … 81
5.3 Recommendation … … … … … … … 86
Bibliography … … … … … … … … … 89
Appendix I … … … … … … … … … 91
Appendix II … … … … … … … … … 92
CHPATER ONE
INTRODUCTION
1.9 BACKGROUND OF THE STUDY
Asset management, broadly desired refers to any system whereby things that are of value to an entity or group are mentioned and maintained. It may apply to both tangible asset and to intangible concepts such as intellectual property and goodwild.
According to Classens, (2002); Asset management is a systematic process of operating maintaining and upgrading asset cost effectively, (American Associate of state highway and transportation Officials). Alternative views of asset management in the engineering environment are: the practice of managing asset so that the greatest return is achieved (this concept is particularly useful for productive assets such as plant and equipment). And the process by which built systems of facilities are monitored and maintained with the objective of providing the best possible service to users (Appropriate for public infrastructure asset).
According to Council of securities regulators of the America, (2000); on asset management and measurement from the Britis standard institute, asset management is defined as:
Systematic and coordinated activities and practices through which an organization optimally and sustainably manages its asset and asset systems, their associated performance, risk the purpose of achieving its organizational strategic plan”
Embodied in this definition of course, are asset of various type (physical, financial, human, information and intangible), which all contribute to the organizational strategic plan.
Best practices dictate that an asset management plan, comprising of three main sub-plans (operating maintenance and risk) or it equivalent, be developed and implemented for physical assets.
The main focus of this research work will be on asset measurement and management on corporate performance, but you will find that some of the risks to asset measurement and management identified here in will be shared with the other asset type categories.
The another suggests that there are at least five such risks that primarily contribute to an organization’s failure t optimally manage their assets
1. Not knowing what they have
2. Over or under-maintenance
3. Improper operation.
4. Improper risk management
5. Sub optimized asset measurement and management systems.
1. NOT KNOWING WHAT YOU HAVE
In common manufacturing industry parlance, this is known as the FDH (fat, dumb, and happy approach to asset measurement and management. While it might seem itutively obvious, many organizations, either don’t appreciate the need to know with a high level of confidence, the asset that they have or they choose not to take time to do so. Either way, this has to be the first major step taken towards ensuring that one’s asset management program is effective. Not knowing what one has is tantamount to playing a game of Russion roulette, if an organization is truly serious about their program key will need to take the following steps to establish the proper foundation to build upon.
Develop a list of all the organizations assets and verify this list with what is in the field. Establish and configure a physical assets hierarchy. ISO 142242 from the international organization for standardization (ISO). Develop the criticality evaluation criteria for the business and apply the verifies asset base. This is where the individual asset are linked to how they affect the organizational strategic plan.
2. OVER OR UNDER-MAINTENACE
During the operational phase of the asset life cycle, there can be a problem of over-maintaining as well as under-maintaining. The key issue regarding over-maintaining typically involves two issues that will make the asset management system in effective. First, there is generally of non-value-added maintenance.
The issue of under-maintenance and how it prevents effective asset management is even more clear-cut. Maintenance is often viewed as a business expense open to cutting like any other in order to maximize profits. With these pressures, maintenance department are constantly struggling with how to balance cost with the performance requirement for the asset such as reliability and uptime. Cost-cutting often wins, however, in the form of delayed proactive maintenance as well as maintenance technicians precise work.
3. IMPROPER OPERATION
Many organization suffer first of all from a lack of understanding of the inherent design capabilities of their asset and, secondly, how best to operate within their ranges to optimize the asset life cycle. For some asset, either operating below or above the design range adversely affects the life of the asset. The best guidance that the author can give in respect of to this issue is to:
1.Find out how your asset should be run
2.Understand the effect of operating outside of design ranges
3.If you can’ operate within the ranges, understand the risks.
1.10 STATEMENT OF THE PROBLEM
Assets management is a relatively new concept and as occurs often in such cases, it is ignored or misunderstood, and frequently unjustly maligned. After all, public works managers of all levels will asset and rightly so, that they have been managing their assets and doing so properly for a very longtime.
It is not surprising then to find that many public working officials have, at best, a lukewarm attitude towards a concept they feel is their own any way. Yet, mention asset management to anyone of them and their ears perk up.
To resolve this dilemma, to establish or refute the validity of asset management as a concept that should become important to public works community and its clients public works the course of American Public Works Association (APWA) if it were to become a promoter and supporter of the concept president Albee has commissioned to taskforce. The original objectives of this taskforce were fairly sample and limited, defined this concept as its benefits to the community, make a quick survey of what is going on around the world related to assets management, and recommend future action on the matter to the board of directions
It soon become apparent however, that assets management is a concept that means widely different things to different people; even on the taskforce, a group supposedly attuned to the concept, there existed many interpretations and visions of that concept. As well, attempts to get information on the subject resulted in limited success. Most of the information pertains to individual or singly-class asset systems of refers to systems in place in other part of the world (Australia) where the global context (governmental, financial) is fundamentally different that our own.
It was also not possible to get information on research and development of this concept in North America. While different groups (National Science Foundation, National Research Council of Canada, etc) are to undertake several projects, there are few if any results yet available. As far as assets management is concerned, we are at the bottom of the learning curve.
Drobetz, (2003); said asset measurement and management is replete with assumes or problems that arise regardless of the generation under which you are operating it the good thing is that many people have already been open to sharing their experiences on asset management, which saves newbies to asset measurement and management time and energy from learning things the hard way. Here is a short list of the most common problems pertaining to asset measurement and management that every asset manager must know of.
THE FOLLOWING ARE THE PROBLEMS OF ASSET MANAGEMENT
1. Lack of updates in the evaluation
2. Miscommunication among departments
3. Incompetence to manage assets
4. Lack of technology demanded by the company
5. Lack of support
6. No balance in asset elements
1.11 OBJECTIVE OF THE STUDY
In every business organization, assets play an important role is assisting the business attain its profitability objectives, particularly in those areas that relate to the profits and returns on asset investment
The basic purpose of this study is to:
a. Assess the impact of asset measurement and management on corporate performance.
b. Examine and profound solutions to the problems and challenges associated with asset measurement and management
c. Stress the need for co-operations to manages the assets of the organization through regular exchange of information.
Assessing the profitability of maximizing of optimizing sales or business volume through the use of trade debtors.
d. Relate how effective asset measurement and management can assist business to attain its predetermined profitability by increasing net returns on asset investment.
1.12 RESEARCH QUESTION
The following research questions are formulated to enable the researcher to know or investigate the impact asset measurement and management on corporate performance with reference to life of First Bank Plc Okpara Avenue Enugu.
1. How does asset measurement and management affect the performance of an organization?
2. What are the solutions to the challenges of asset measurement and management in an organization?
3. Is there any need for corporations and firms to manage its assets properly?
4. How effective can asset measurement and management assist business to attain its predetermined investment.
1.13 HYPOTHESIS
The research hypothesis of this study posses the following:
Ho: There is no relationship between assets measurement and management of an organization and performance of the organization.
Hi: There is a relationship between assets measurement and management of an organization and performance of the organization.
1.14 SIGNIFICANCE OF THE STUDY
The study is significance for the following
i. Students: This study will serve as a foundation for further research on this topic to students in the school for financial studies.
ii. Industries: This study will be of great important to industries wishing to improve on their standard of operation.
This research work serve as an addition by the existing literature and it field.
1.15 SCOPE AND LIMITATIONS OF THE STUDY
This study covers the impact of asset measurement and management on corporate performance considering the wide nature of the topic the target population, the seriousness of the problem and the high time budget available to the research it would have been too cumber some to carry the research further than chosen. The researcher then limits the study to life of First Bank Plc Okpara Avenue Enugu.
Nigeria limited bearing in mind that it could serve as a representation of the industries that are financed by the public funds. The study is intended for financial of all levels and is hoped that it will contribute to their skills and knowledge.
It is addressed to administrators decision markers and other non financial renders in the hope that they will appreciate the damage done by poor financial management and therefore help to improve on the situation.
1.16 DEFINITION OF TERM
i. Asset: This is defined as any item of economic value owned by an individual or corporation especially that which should be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment. According to oxford dictionary, Asset is defined as a valuable or useful quality or skill.
ii. Measurement is the process observing and recording the observations that are collected as part of a research effort.
iii. Management: In all business and organization activities is the act of getting people together to accomplish desired goals and objectively.
iv. Performance: Is generally comprises an event which a performer or group of performer behave a particular way for another group of people.
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