ABSTRACT
This study looked at the impact of dispersed manufacturing system on performance of
Nigerian firms. The need to reduce cost of production has made organizations to adapt
to the many challenges the manufacturing industry faces today. Such challenges for
industrial companies include: innovation, speed, and flexibility, possibilities of
information technology and data-communication, the globalization of markets, and
the ongoing specialization of firms. Another phenomenon is the increasing
participation of innovative small and medium sized enterprises in international
manufacturing networks.
As such, the problems associated with manufacturing firms
either dispersed or concentrated are; inability of dispersed or concentrated firms to
minimize cost of production; un-sustainability and growth of potential; insufficient
return on capital employed and insufficient earnings on per book value basis. It is
against this background that this study sought to examine: the impact of cost of
production on sustainability and growth of dispersed and concentrated manufacturing
firms in Nigeria; the impact of cost of production on return on capital of dispersed and
concentrated manufacturing firms in Nigeria and the impact of cost of production on
earnings per share of dispersed and concentrated manufacturing firms in Nigeria. The
research design adopted for the study was the ex-post facto research which enabled
the researcher to make use of secondary data from ten (10) manufacturing firms as
well as determine cause-effect relationship between dependent and independent
variables both on a firm by firm basis as well as on aggregate basis. The cost of
production rate (CPR) was the dependent variable while Sustainability and Growth
(SG), return on capital (ROC) and earnings per share (EPS) were the independent
variables as performance indicators and the study adapted the OLS Regression model
to test the hypotheses.
The findings from the study revealed that on a firm by firm
basis, there was mixed variations on the impact cost of production rate on the
performance of Nigerian firms however on aggregate basis for dispersed firms; there
is positive non-significant impact of cost of production rate on sustainability and
growth (t-value =0.109, SG coefficient = 0.002); there was a positive non-significant
impact of cost of production rate on return on capital (t-value = 1.030, ROC
coefficient = 0.353); and the impact of cost of production rate (CPR) on earnings per
share (EPS) for dispersed firms was positive and non-significant (t-value = 0.595,
EPS coefficient = 0.001). On the other hand for concentrated firms on aggregate basis,
there was positive non-significant impact of cost of production rate on sustainability
and growth (t-value = 0.103, SG coefficient = 0.229), there was a positive nonsignificant
impact of cost of production rate on return on capital (t-value = 0.695,
ROC coefficient = 0.180) and the impact of cost of production rate on earnings per
share for concentrated firm is negative and non-significant (t-value = 0.599, EPS
coefficient = -0.015). Thus, it was recommended that for improved performance,
firms should adapt dispersed manufacturing system since performance indicators
performs better when compared with concentrated firms and government should
increase expenditure on basic infrastructural facilities such as road, electricity as to
enhance the growth of manufacturing firms in Nigeria.
