-
Effectiveness Of Profit Planning In Nigerian Organisations
CHAPTER ONE -- [Total Page(s) 3]
Page 3 of 3
-
-
-
1.5 FORMULATION OF HYPOTHESES.
To achieve the objective of the study, the following hypotheses are formulated.
HYPOTHESIS ONE
Ho – Pricing Policy of a firm has no influence on the degree to which a firm can achieve optimum profitability.
Hi – Pricing Policy of a firm has influence on the degree to which a firm can achieve optimum Profitability.
HYPOTHESIS TWO
Ho – Effective profit planning has no effect on the profit performance of a firm.
Hi- Effective profit planning has a major effect on the profit performance of a firm.
1.6 SCOPE OF THE STUDY
Since
no single research can validly cover all areas of the topic the
researcher tends that thrust of this project will be limited within the
scope of how management’s performance of small scale manufacturing firms
are influenced by the choice of its pricing policy and its profit
planning. The study will focus primarily on small scale manufacturing
firms in Lagos state to be precise and its environs from where the
manufacturing firms of this study are drawn to enable the researcher
carryout on extensive investigation on this subject. The companies to be
studied are: vintage Nigeria plc ijanikin Lagos and Ojukwu pen farms
igbesa Ogun state.
1.7 LIMITATION OF THE STUDY
The researcher is limited by time constraints. Since the semester is very short and has a bulk of academic exercise.
The researcher is also constrained by unavailability of funds required for an extensive research of this magnitude.
Finally
and importantly, most small scale manufacturing firms that were studied
lack adequate and organized accounting and decision making system, poor
organizational chart and structure also their general unwillingness to
corporate or give out information, all, these married the effectiveness
of this research.
1.8 SIGNIFICANCE OF THE STUDY
This research will
serve as a guide to firms in setting the most advantageous pricing
policy giving its individual unique situation which will enhance
profitability in the short and long run situation. It will help them to
avoid choosing arbitrary prices without considering its distinctive
situation and important factors.
It will serve as a guide in choosing
pricing strategy which strikes a balance between what the consumers
wants to pay for a product and the price the firm is willing to sell;
also this research will expose them (the firm) to the need for
accounting information in carrying out this decision.
The research
work will also be useful for the economy in the sense that if firms have
substantial control over price setting, then their pricing behavior can
influence national output/income and hence community welfare.
Finally, the research work will be useful for those carrying on further research on this or related topic.
1.9 DEFINITION OF TERMS.
PRICING
POLICY: It is a guiding philosophy or course of action designed to
influence and determine pricing decisions. Pricing policies set
guidelines for achieving objectives.
PROFIT PLAN: The profit plan is
the operating plan detailing revenue expenses and resulting to net
income for specific period of time. It is the firm’s optimal plan in the
light of management expectation in future.
COST: Expenses incurred to procure something which may be labour, material, facilities or resources
PROFITABILITY: This is the capacity or potential of an organization to make profit
PRICE:
This is the amount of money charged for a product or service, or a
value that a consumer exchanges for the benefits of having or using a
product or service.
VARIABLE COST: They are cost that varies with level of production. They are constant per unit but vary with total production.
PRODUCT: This can be seen as any item, sub-assembly or cost unit manufactured or sold by an organization.
MARKETING
MIX: This is the combination of the four primary elements that
comprises of a company’s marketing programmes which are price, place,
product, and promotion (advertising).
CHAPTER ONE -- [Total Page(s) 3]
Page 3 of 3
-
