THE IMPACT OF LEADERSHIP CAPABILITIES ON CORE COMPETENCY IN MULTINATIONAL FRIMS IN NIGERIA (A CASE STUDY OF CADBURY AND NESTLE PLC)

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

          The research found that talent is important among leaders, but only exceptional talent makes a real difference. As expected, the capabilities of executives at companies in the top quartile of our research pool were about 20 percent higher than those from the bottom quartile (Varidunn & Naveen, 2020). There was a high correlation between executives with “excellent” capabilities and financial performance, while merely “good” performances showed no correlation. In addition, of all the management capabilities we analyzed, customer impact—understanding and anticipating customer needshad the greatest influence on corporate growth under almost any strategic situation and across all management levels.Business organizations face a challenging future that characterized with uncertainty, high risks, high competitiveness, and speed of technology advents. Markets are becoming more diverse and complex than ever with globalization. Sustain at highly competition, business organizations require not only to possess new talent employees and Intellectual Capital but also to engage them to achieve strategic goals (Irtaimeh et al., 2019; Obeidat et al., 2017). Therefore, leaders and managers should be aware and alert if they want to achieve growth and profit targets. As environmental turbulence increases, strategic issues and options become more sensitive to their development. It would enable a better understanding of capability needed to respond to various levels of environmental turbulence.

          In turbulent environments, strategic leadership becomes more important than ever to steering their businesses during the intensified competition and thus the quality of leadership is critical (Irtaimeh, 2018; AL-Syaidh et al., 2019). In the late 1980s, many social science researchers have gone on a debate whether leadership could make a difference in organizations while some others suggested that study of leadership has reached a culminating point. Moreover, leadership plays a pivotal role inside organizations concerning its strategic orientation (and Options). Nowadays, the study of leadership has been rebranded again as that would make them able to lead and steer the organization during the tough situations. In the era of global markets, organizations start to widening up and diversifying their operations to compete locally, regionally, globally, and internationally for successful growth and survival; therefore, strategic leaders require certain competencies such as strategic thinking, strategic vigilance, change management, and shared values & a clear vision (Norzailan, Yusof, & Othman, 2019).

          The increasing state of globalization has resulted in decreased product life cycle and it has also increased the stress being placed on firms as they seek to achieve competitive advantage in the business environment. A number of goals and various objectives, which all revolve around holding large market share and ultimately bettering firm performance in relation to that of rivalry firms (Lin & Wu, 2014) stated are part of the guiding principles for the firms. The principal goal of embracing successful processes of management is to make the organizational performance improved over time. The concept of firm core competence has emerged as a major concern area when it comes to the improvement of the performance in organizations (Yin, Chen & Zhao, 2019). The modern business atmosphere brings about a more demanding situation for the reason that there exist multiple factors that companies have to grapple with within a multifaceted and changeable environment in terms of globalization, technological growth and the speedy diffusion of new technologies (Marcusson & Lundqvist, 2019).

          Yang (2015) explained that the rationale behind strategic management is to build up and preserve the assets and skills while choosing the strategies that if transformed will lead to competitive advantages. As explained by Porter (1980) a company has the ability of achieving its feasible gain through the value production to its clients and also while engaging in strategic activities at a lower cost relative to its competitors. Thriving organizations plausibly have certain competencies that give them capability to execute key activities remarkably well (Lin & Wu, 2014). These abilities have been described as “core competencies” and they represent activities initiated by the firm to gain competitive advantage (Marcusson & Lundqvist, 2019).

In the global scene, Arslan (2019) shared that business problems, environmental and ecological crises have pushed the firms in Turkey to consider core competencies that are aligned to environmental sustainability. The entire business processes must become green-business processes and as they yield higher incomes, they also improve environmental aspects. Adoption of green core competencies will enable such firms to employ environmental friendly policies. Duan (2019) revealed that core competencies like knowledge and skill systems that are incorporated into the organizational culture and structure of an enterprise will likely generate competitive advantage. The study was aligned to theory of core competence and brought changes to Chinese business philosophy of competing for market shares for the final products but rather the competition of the market share for core intermediate products. In Nigeria, Iornem and Adikpo (2020) noted that many countries had adopted and configured ways to market their tourist destination by building business models that support competencies.

1.2 Statement of the Problem

          Various authors have fronted various descriptions of firm performance. As discussed by Akgün (2020) firm performance is akin to a position of competitiveness often attained by achieving a high efficiency rank, which serves to make the presence in the market maintained. In an institution, performance measurement entails presentation of quantified outcome of the different activities that are carried out within the firm (Juma & Okibo, 2019). When measuring it, it is good to comprehend the connection present between the goals, measures of performance and organization outcome and the significance of the performance metrics. In many modern-day organizations, performance is carried out using three types of techniques.

          Strategic leadership literatures have identified long lists of competencies relating to leadership for effective management. Admittedly, the dynamic and rapidly evolving environment produce increasing uncertainty, complexity, and higher competition, hence, organizations suffer from lacking highly skilled leaderships. As long as complicated situations emerging, leaders should learn effectively how to manage and lead strategic plans that are requiring supplemental critical skills and competencies regardless of the level of leadership involved and thus adding more competencies to their profiles. Notwithstanding, many strategic leadership missed their direction and failed to keep organization on the right path. Despite several studies on the relevance of leadership core competences and capabilities, there is still a dearth on how these two construct can influence each other and at large affect the performance of organization and its employees. It based on this background that the present study seeks to examine the impact of leadership capabilities on core competency in multinational firms in Nigeria with specific reference to Cadbury and Nestle plc.

1.3 Objectives of the Study

The main aim of this study is to examine the impact of leadership capabilities on core competency in Cadbury and Nestle plc. Other specific objectives of the study include;

1. To determine the competencies required for effective strategic leadership in Cadbury and Nestle plc.
2. To examine the competencies required for effective strategic leadership are core inCadbury and Nestle plc firms.
3. To determine the level of experience a factor in identifying the core competencies in Cadbury and Nestle plc
4. To examine the core competencies identified for traditional leadership adequate for effective strategic leadershipin Cadbury and Nestle plc firms.

1.4  Research Questions

          The following questions will guide this study;

1. What are the competencies required for effective strategic leadership in Cadbury and Nestle plc?

2. Which of the competencies required for effective strategic leadership are core inCadbury and Nestle plc firms?

3. Is level of experience a factor in identifying the core competencies in Cadbury and Nestle plc?

4. Are the core competencies identified for traditional leadership adequate for effective strategic leadershipin Cadbury and Nestle plc firms?

1.5  Research Hypotheses

The following were hypothesized;

Hypothesis 1

1. significant impact of lleadership capabilities on core competency in Cadbury and Nestle plc.
2. There is a significant impact of leadership capabilities on core competency in Cadbury and Nestle plc

Hypothesis 2

1. here is no significant relationship between leadership capabilities and core competency in Cadbury and Nestle plc.
2. There is a significant relationship between leadership capabilities and core competency in Cadbury and Nestle plc.

1.6 Significance of the Study

          The findings will be essential the management of Cadbury and Nestle plc, as it will furnish them with additional insight on core competencies and performance. Adoption of core competencies will improve firm performance and through employment of the study suggestions and recommendations.

Policy makers and business people will utilize the findings of this research since it offers them with various policy proposals on core competencies and performance of firms.

The findings of this study will guide the policy makers in coming up with effective regulations, policies and laws that will guide service industry players towards improving their performance.

Furthermore, the academicians will benefit from the research and it will present bases for prospect researchers to do additional research on this subject area.

The findings of this study will in addition provide or suggest for further researches to be done by upcoming researchers. It will also be a source of empirical literature and can be used as a referencing material.

1.7 Scope of the Study

          The study covered management of Cadbury and Nestle plc and all its employees. The study was restricted to core competence and impact it had on performance of management of Cadbury and Nestle plc. The study was limited to only these four core competencies marketing competence, leadership capabilities and human resource competence, research and development competence and financial resource competence and the employees who were considered as respondents in the study were drawn from the three management levels – senior, middle and lower levels.

1.8 Organization of the Study

          This project is divided into chapters, the structure is such that it starts with background, research problems, objectives, importance, scope and limitations of the study are in chapter one. The second chapter comprised of reviews of literature both the theoretical and empirical. It also showed the gaps in research of the study. Chapter three presented the methodology of selecting the respondents and the instrument used to collect data and how they were analyzed. The fourth chapter presented the data analysis in tables and the last chapter five involved the summaries of the project, the conclusions and recommendations.