Environmental Dynamism, Competitive Strategy and Non-Financial Performance of Manufacturing Firms in Nigeria

Idowu, A (2017-06)

A Thesis Submitted to University of Lagos School of Postgraduate Studies Phd Thesis


Over the last two decades or so, the Nigerian business environment, particularly the manufacturing industry, has remained dynamic and turbulent with attendant consequences for firm’s performance. Extant studies have focused attention on the relationships between environmental dynamism, firms’ strategy and financial performance. However, studies investigating the relationship between environmental dynamism, firms’ strategy and nonfinancial performance in a developing economy are scanty and inconclusive. This study investigated the relationship between environmental dynamism, competitive strategy and nonfinancial performance of manufacturing firms in Nigeria. It adopted cross-sectional survey research design. Survey questionnaire was used to obtain primary data from strategic managers in the selected seventy manufacturing firms in Lagos State, Nigeria. The choice of seventy manufacturing firms was arrived at through multistage sampling techniques, while the administration of questionnaire was through random sampling method. Out of the 420 copies of the questionnaire administered through the Manufacturers Association of Nigeria, 351 were completed and returned representing 83.4% response rate. Data generated were analysed systematically by adopting descriptive statistics (frequency, mean, standard deviation, correlation and one-sample t-test) and inferential statistics (regression). The results revealed that there was a positive and significant relationship between environmental dynamism, competitive strategy and non-financial performance. It also shows a justified coefficient of determination R2 = 0.208, meaning that the fitted regression model explained a justified 20.8% of the variability in nonfinancial performance. Hypotheses tested indicated that there was sufficient evidence to support the rejection of the six of them. The findings of the study show that industry forces and generic strategy contributed positively and significantly to the success of the manufacturing firms in Nigeria. The study then recommended that the Nigerian government needs to provide the enabling environment that promotes enabling strategic actions in order to contribute meaningfully to the Gross Domestic Product, and that managers should recognise that the fast pace of change in the Nigerian business environment requires innovative strategies that will deliver optimum and sustainable competitive advantage.