DOES TASK ENVIRONMENT MODERATES ORGANIZATIONAL PERFORMANCE? EVIDENCE FROM THE NIGERIAN MANUFACTURING INDUSTRY

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International Journal of Mechanical Engineering and Technology (IJMET)
Volume 10, Issue 07, July 2019, pp. 8-21, Article ID: IJMET_10_07_002
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=7
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
© IAEME Publication
DOES TASK ENVIRONMENT MODERATES
ORGANIZATIONAL PERFORMANCE?
EVIDENCE FROM THE NIGERIAN
MANUFACTURING INDUSTRY
Chizoba P. Nwanah
University of Nigeria
Bamidele S. Adeleke
Emmanuel K. Agbaeze
ABSTRACT
This study empirically evaluates the moderating effect of task environment on the
organizational performance of manufacturing firms in Nigeria. The study ascertains
the extent of relationship between the bargaining power of suppliers and firm
productivity and as well accesses the extent to which bargaining power of competitors
affect firms competitive advantage. A descriptive survey design method was adopted
and a self-administered closed-end questionnaire was used to sift data from
respondents who were management and non management staff of ten selected
manufacturing organizations in southeastern Nigeria. A sample size of 499
respondents was drawn from the population. The finding revealed that there is a
significant positive relationship between bargaining power of suppliers and firms’
productivity. The study also found that bargaining power of competitor has a
significant positive effect on manufacturing firms’ competitive advantage. In lieu of
these findings, the study recommendations that manufacturing firms should be
committed to maintaining a cordial relationship with their suppliers and avoid
possible conflict in both short and long-run. Further, manufacturing firms are also
advised to be more strategic in managing their competitors. This can be achieved
through the advancement of blue ocean strategy.
Key words: Suppliers Bargaining Power; Customers Bargaining Power; Competitive
Advantage; Blue Ocean Strategy.
Cite this Article: Chizoba P. Nwanah, Bamidele S. Adeleke, Emmanuel K. Agbaeze,
Does Task Environment Moderates Organizational Performance? Evidence from the
Nigerian Manufacturing Industry. International Journal of Mechanical Engineering
and Technology 10(7), 2019, pp. 8-21.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=7

Does Task Environment Moderates Organizational Performance? Evidence from the Nigerian
Manufacturing Industry
1. INTRODUCTION
The business environment plays a very important role by shaping the ability of the
organization to maintain successful relationships with its clients. It is the environment that is
likely to determine to a great extent the success of business (Shaikh, 2010). Every business
organization has to interact and transact with its own internal , task environment such as how
it is structured, how it is provided with working capital and other resources, co-operation of
labour. It also depends on general environment such as government policies, external trade
and international environment, the socio-cultural environment and the technological
environment (Fernando, 2011). Dauda and Ismaila (2013) aver that businesses depend on
their environment to get input resources such as information, ideas, raw materials finance and
labour for the consumption of finished goods and services. This implies that organizational
business activities are influenced and shaped by environmental forces. Modern business
manager operates in a more dynamic environment. The change in the environment has been
rapid and unpredictable. The multinational business managers in Nigeria operate in a dynamic
business environment characterized by risks of multiple taxation, currency devaluation,
inflation, repatriation, expropriation, confiscation, campaigns against foreign goods,
mandatory labour benefit legislation, kidnapping, high exchange rate, terrorism, and civil
wars (Griffen, 2005). Actions taken by government such as regulatory, legal framework, and
political changes may decrease business income and act as barriers to foreign investment. The
primary objectives of business is to ‘‘grow and to make profit in the environment in which it
operates” (Eruemegbe, 2015).
Unarguably, the environment in which the business operates has far reaching effects on
the vision and the mission of the business. Dogara (2015) corroborates this view and further
states that the environment in which business operates is a complex, multi-focus dynamic, and
has a far- reaching effect on such organization. Nwaiwu and Mark (2015) state that the
environment tends to shape the outlook, and goal of the organization, by placing constraints
on them, thereby promoting multiple contexts that influence how organizations operate. It is
therefore, an incontrovertible fact that business organizations, all over the world, do not exist
and operate in Vacuum. Adibu and Olanye (2006) aver that business organizations exist and
operate within environments, which are aggregate of all conditions, events, circumstances and
affect the business organization. The views of Oginni, (2010) was in support as he opined that
no business organization can operate successfully in isolation without dependence on
supportive institutions, variables and factors that is, business organization exists and operates
within an environment where there is complex interplay in terms of activities as well as
networks of relationship between and among human resources, material resources and other
systems.
Limna (2012) assents to the foregoing view and further avers that business organizations
must interact within those forces that influence their decisions, directions, actions, size,
health, profitability and the performance of the organization as a whole. Since business
organizations make demands on the society (environment) on them, it becomes imperative
that the management, in any organization, must interact with and respond to environmental
factors external and internal to them. Folan and Browne (2015) agree with this assertion and
states that the survival and success of organizations depend on the appropriate adaption to a
complex and over changing environment. Ukaegbu (2014) states that the contemporary
environment is becoming dynamic and competitive, since business organizations do not
operate in vacuum, they affect and are affected by environmental conditions. Therefore,
business organizations irrespective of their objective must take into consideration, these
environmental opportunities and constraints. The need to study business environment is very
important considering the fact that business organizations do not operate in vacuum. And an

Chizoba P. Nwanah, Bamidele S. Adeleke, Emmanuel K. Agbaeze
effective management in complex and dynamic society requires the assessment of strengths
and weaknesses of the organization and the opportunities and threats provided by the
challenges of the external environment, hence for survival and growth, organizations must
cope and adapt to these challenges posed by the ever changing environment in which manager
operate means that managers must not only be aware of what constitutes the elements of their
business environment but also should be able to respond to the forces of the environment
which inevitably impinges on the operations business organization
Historically, Graffin (2005) informs that the importance of business environment and the
need to consider forces external to the organization were first incorporated in management
thought during the late 1950s. Graffin (2005) adds that it was during the 1960s that
management came to recognize that organizations must actively consider their environment.
The environment of an organization affects every aspect of its success and consequently every
decisions management makes. Prior to the 1960s, managers concentrate attention on their
economic and technical environment (Bell, 2006). Bell (2006), states that changes in human
attitude, social values, political forces, and legal liabilities have forced managers to broaden
the scope of the business environment. In line with foregoing, business organizations in
Nigerian are significantly influenced by the dynamic business environments in the country. In
contemporary Nigerian business environment, performance of Nigerian companies is
predicated on factors such as low-sales, high cost of production, low capital utilisation, lack of
foreign exchange to source needed inputs, poor power supply, and low quality of goods and
services, among others. These issues have led to lack of proper integration and coordination
of various corporate subsystems in Nigerian organizations, resulting in the failure to achieve
the stated goals and objectives (Kennerly & Nelly, 2003). Enterprises are subsumed in the
environment with which they interact by importing inputs and exporting outputs. Thus, the
vagaries and the extremities of the environment affect the fortunes of organizations (Kennerly
& Nelly, 2003). Considering that performance is crucial objective of an organization, it is
generally accepted that the structure and decision making in an organization is influenced by
environmental complexity and volatility (May, Jr, Stewart & Sweo, 2000).
Eruemegbe (2015) informs that the Nigerian business environment has undergone a lot of
changes, starting from the period of oil boom in the 1960s and early 1970s, and the Structural
Adjustment Programme (SAP) in the late 1980s from the Company Act in 1960s to Allied
Matter Act in the 1990s. Undoubtedly, each of these periods brought separate opportunities
exploited by some firms or problems that inhibited the survival of some business
organizations. At present, the prevailing business environment in Nigeria is characterized by
inflation, low Foreign Direct Investment (FDI), high exchange rates, uncertainty/insecurity
occasioned by the Boko Haram insurgency in the North, the Niger Delta militancy in the
South-South, the Indigenous Peoples of Biafra (IPOB) in the South-East, the fall in oil price,
high interest rates, corruption, infrastructural decay, among others. The success of business
operations is significantly influenced by business environments. Also the interplay between
business organization and the environment determine the level of economic growth of a
country.
The level of performance in the Nigeria manufacturing sector is not satisfactory as the
level of growth witness in the sector is not much. Poor supply of energy (electricity) in
Nigeria, apart from its unavailability and epileptic supplies, the greatest grouse comes from
astronomical billing and tariff structure which has become a hindrance within the Nigeria
manufacturing sector: as such leads production to low capacity which has negatively affected
firms market share, new product development, profitability, cost of production and low capital
utilization in the manufacturing sector. The exchange rate of naira is unstable; the economy is
also plagued by a rising exchange rate and interest rate. Taxes are deliberately high and often

outside the reach of organizations. These increases in cost translate directly to the bottom line
of all Nigeria manufacturing companies. However, this brings out impediments on the much
needed growth the sector is expected to render to the development and growth of selected
manufacturing firms and nation’s economy in general. Basic social infrastructure, include
security appears to be elusive. To this end, the study ascertains extent of relationship between
the bargaining power of suppliers and firm productivity; and accesses the extent to which
bargaining power of competitors affect firms competitive advantage.
2. REVIEW OF LITERATURE
2.1. The Concept of Task Environment
Asheghian and Ebrahimi (1990) and Grant (1999) argued further that the task environment is
the closest environment of the organization and its elements is influencing the organization
directly. Task environment is made up of factors such as consumers, competitors, suppliers,
labour market, industry and financial resources. Factors in the task environment usually create
greater and perceived uncertainty to organizations than factors in the general environment.
This is because it is believed that the task environment, which is connected with the short-run,
is more volatile than the general environment that is connected with the long-run. Lan and
Chris (2003) avers that task environment consists of the organization’s immediate
environment that affects the performance of the organization. Pulendran, Richard and Robert
(2000) in their related work on business environment observed that the task environment in
which organizations operate is complex and constantly changing and found that a significant
characteristic of the task environment and business organization is competition. This was
supported by the views of Asika, (2001) that organizations that recognizes the presence and
intensity of competition have a greater tendency to seek out information about customers for
the purpose of evaluation and to use such information to their advantage thus enabling
competition to drive business organizations to look for their customers in order to understand
better ways to meet their needs, wants, and thereby enhances organizational performance
(Azhar, 2008).
Customers and competitors are task environmental factors close to a business that can
have direct impact on the business’ operations and success. Before deciding corporate strategy
a firm should carry out a full analysis of the firm’s task environment (Simsek, Veiga,
Lumbatkin, 2007 ). This is to say that, customers and competitors are very important factors
that need to be considered because of the impact it might have on the business operations. An
organization should always be prepared to do analysis of the task environment factors and to
know the responsiveness. This is because a firm’s success can be influenced by the firm’s
environment factors. These factors could be seen as customers, suppliers, employees,
competitors, shareholders and others. organizations can always strive very hard to offer
benefits that are better compared to those of the competitor ( Tabetando, 2013).
A firm can add-value if the firm involve customers and make them
knowledgeable/intelligent when adding value for their offering. In order for firms to be on a
safe side, organizations should be able to have continuously redefined, restructured and
redesigned company’s competencies and networks in order to keep the value-adding activities
responsive. This phenomenon can make it possible to identify the success of most firms and
failures of other firms. Task environmental factors are linked to a business that may affect a
company’s business operations, growth and success. Simsek et al., (2007) opine that
Customers and competitors are micro environmental factors close to a business that can have
direct impact on the business’ operations and success. Before deciding corporate strategy a
firm should carry out a full analysis of the firm’s task environment. This is to say that,

customers and competitors are very important factors that need to be considered because of
the impact it might have on the business operations. Malhotra (2015) opines that task
environment consist of these industry factors which are external to the firms but have a direct
and specific impact upon the organization and are in turn affected by organizations operations
2.2. Suppliers as Factor of Task Environment
Supplier is the important force of the task environment of an organization or companies. The
suppliers are those who supply the inputs like raw materials and components to the
organization. Firms that rely on high quality partnership with suppliers are better prepared to
adapt to unforeseen changes, identify and produce better solutions to organizational problems,
besides it will help to reduce monitoring costs which result improvement in the economic
outcomes. Lahiri, Kedia and Mukherjee (2011) identified that higher partnership quality
between the buyer and the supplier leads to increased performance benefit and management
capability of the firms. The manufacturing firms have realized the importance of the
performance of their supplier to the establishment and sustaining of the competitive advantage
(Goffin, Lemke, and Szwejezewski, 2006; Li, and Filer 2006). Gadder, Hakansson and
Persson (2010) maintain that many organizations now need to differentiate among its
suppliers in order to handle the variety, complexity and heterogeneity in the supply base.
Uncertainties are generated due to the several supply problems like maintenance of inventory,
delay of supply of inventory to organization. Many organizations accord high importance to
vendor development, vertical integration for solving the supply problem. Lan and Chris
(2003) avers that an Organization that depends on a single supplier is a risk factor due to a
strike, lockout or any other production problem of the supplier, an organization has depended
on several suppliers of the same raw material. Similarly, a change in attitude or behaviour of
the supplier may also affect the organization. Hence, multiple sources of supply often help
reduce such risk. The supply management assumes more importance in a scarcity
environment (Graffin, 2005). Manufacturing firms deal with a wide range of suppliers with
different levels of importance and which require differential treatment that will drive a firm to
its competitive edge. Many organizations have recognized that their competitiveness is based
to a large extent on the ability to establish a high level of trust and cooperation with suppliers.
Thus, organizations must choose the suppliers that enable them to increase competitiveness
and performance. Gavrea, Ilies, Stegerean (2011) considered three criteria: quality, delivery
and price.
This is also in line with the views of De Toni and Nassimbeni (2000) that the elimination
of inspections of incoming materials can be only achieved by considerably improving the
quality of suppliers. Improving supplier quality includes activities such as certifying suppliers
on quality and providing technical assistance to them. Supplier quality improvement would
result in improved quality and productivity, enhanced design of the parts, and reduced costs
(Lee and Ansari, 1985). It is therefore hypothesized that:
HA1: There is a significant positive relationship between the bargaining power of suppliers
and firm’s productivity
2.3. Competitors as Factor of Task Environment
Globalization of the economy and the technological changes has transformed the business
environment, with new challenges and opportunities emerging for firms. (Hansen and Løvås,
2004; Johanson and Vahlne, 2009). Increased competition, developing customer needs and
responsiveness to firm’s environment has become a vital factor for companies. (Homburg,
Grozdanovic, Klarmann , 2007). This is to say that a company’s product /services could be
the results of complex activities. Most companies today work very hard to enhance its

services/ products before offering them to customers. Value-adding could be in the form of
increasing the products prices and value.
In a company’s environment (customers and competitors), researchers in marketing have
argued that responses to customer and competitor changes can have several beneficial
consequences for a firm (Gatignon, Robertson, Feinn, 1997; Jayachandran, Hewett, Kaufman
2004). This implies that companies should strive to respond always to the opportunity and
threat posed from the firm’s changing environment. Also if a business does not take into
consideration the competitors’ responsiveness, the firm can find it very difficult to compete
against the competitor. Every firm needs customers therefore companies marketing plan
should be able to attract and keep customers with products that meet customers’/consumers’
needs. It is always important to consider customers’ and competitors’ responsiveness to the
changes. Competition encourages progress and product developments, it forces organizations
to be more innovative and productive. It is important to recognize that the area of competition
is not limited to customers only but it extends to competition for all scare resources such as
raw materials. Thus management must congruously look for cheaper but quality substitutes
for raw materials and must acquire and retain an effective and dedicated work force by
offering good working environment and providing motivation for self-actualization goals
(Mahotra, 2005).
Grafin (2005) avers that competiton strategies are well guarded secrets, research activities,
new product developments and future advertising campaigns of competitors are extremely
highly protected secrets hence management of organisation must continuously monitor
competitor activities and analysed each competition to gain an understanding of its probable
actions and response. Porter (1985) proposed that business strategy such as competitive
strategy is strongly linked to profit performance. Strategy execution is the key link between
competitive strategy and firm performance (Ward & Duray, 2000). Day (1994) who linked the
competitive advantage with performance argued that firms who possess higher
competitiveness will relatively gain higher business performances. A well-structured business
firm and product differentiation from its competitors in the industry generates firm’s
competitive advantage that leads to higher business performances (Hitt, Ireland, and
Hoskisson , 2004). Hence, it is hypothesized that:
HA2: The bargaining power of competitor has a significant positive effect on firm competitive
advantage
Firms that pursue competitive strategy tend to create unique image in the mind of the
customers by offering products that are inimitable by their competitors (Miller, 1988). The
ability of the firms to offer this strategy in their product in terms of reliability, durability,
features and aesthetics generates higher performance (Mintzberg, 1988; Amoako-Gympah
and Acquaah, 2008). Therefore, competitive strategy generates a firm’s competitive
advantage over its competitors and results in higher performance (Amoako-Gympah and
Acquaah, 2008). This was supported by the views of Dess, Lumpkin and Taylor (2005) that a
competitive advantage exists when a firm has a product or service that is perceived by its
target market customer as better than that of its competitors. The magnitude of a firm’s
competitive advantage is the difference between the perceived valve created and the cost of
produce the good or service compared to its direct competitors. If the economic valve created
is greater than that of its competitors, the firm has a competitive advantage.

2.4. Theoretical Anchor: Porter’s Five Forces Theory
This study is anchored on Porter’s Five Forces Theory. The justification of adopting this
theory is strengthened by the obvious fact that the theory made a theoretical exposition of the
bargaining and power of suppliers and customers which are the most significant dimensions
of the variables of this current study
Porter’s 5 forces theory shows the competitive environment of a firm. It is a strategic
watch to avoid putting the competitive edge at risk and ensure the long-term profitability of
products. For the company, this vision is quite important because it allows the firm to
orientate its innovations in terms of choice of strategies and investments. The profitability of
businesses within the industry sector depends on the following forces:
Bargaining power of suppliers: The bargaining power of suppliers is very important in a
market. Powerful suppliers can impose their conditions in terms of price, quality and quantity.
On the other hand, if there are a lot of suppliers their influence is weaker. One has to analyze
the number of realized orders, the cost of changing the supplier, the presence of raw materials,
etc.
Bargaining power of customers: If the bargaining power of customers is high, they
influence the profitability of the market by imposing their requirements in terms of price,
service, quality, etc. Choosing clients is crucial because a firm should avoid to be in a
situation of dependence. The level of concentration of customers gives them more or less
power. Generally, their bargaining power tends to be inversely proportional to that of the
suppliers.
Competitive rivalry within the industry: The competition between firms determines the
attractiveness of a sector. Companies are struggling to maintain their power. The competition
changes based on sector development, diversity and the existence of barriers to enter. In
addition, it is an analysis of the number of competitors, products, brands, strengths and
weaknesses, strategies, market shares, etc.
Threat of new entrants: It is in a company’s interest to create barriers to prevent its
competitors from entering its market. The competitors are either new companies or companies
which intend to diversify. These barriers can be legal (patent regulations, etc.) or industrial
(products or single brands, etc.), etc. The arrival of new entrants also depends on the size of
the market (economy of scale), the reputation of an already established company, the cost of
entry, access to raw materials, technical standards, cultural barriers, etc.
Threat of substitute products: Substitute products can be considered as an alternative
compared to the current supply on the market. These products appear due when the current
state of technology or innovation evolves. The products of existing companies are thus
replaced by different products. These products often have a better price/quality relation and
come from sectors with higher profits. These substitute products can be dangerous and
companies should anticipate coping with this threat.
3. METHODS
This study adopted a descriptive survey method. The choice for survey research design for
this study was because it is valuable for assessing opinions, perception and trends for a given
phenomenon. The study domiciled its activity in South East, Nigeria. The target population of
the study includes the management staff and non management staff of the selected
manufacturing firms which are: Innoson Technical and Industrial Ltd, Ibeto Petrochemical
Industries, Eastern Distilleries and Food Industries, Emenite Ltd, Andy Young Aluminum
Ltd, Juhel Nigeria Ltd, Sharon Paint and Chemical Ltd, A-Z Petroleum Product Ltd, Hardis
and Dromedas and Tonimas. These manufacturing firms are purposively selected because

they have sizeable workforce and due to their relatively thriving performance in the Nigerian
Manufacturing industry. The total population of staff of the selected firms was 2,980. Sample
size of 499 was derived using Cochran statistics formula. Convinience sampling technique
was adopted to select the respondents from the population. The rationale for this is that
respondents at the organizations are often too busy to be contacted. A well-structured close-
ended questionnaire was used for the data collection. The 5-point likert scale with: SA –
Strongly Agree, A – Agree, U – Uncertain, D – Disagree, SD – Strongly Disagree was used to
develop the answer options for the questionnaire. Using Spearman’s Rank order correlation
coefficient of reliability, the exercise guided a correlation coefficient of approximately 0.93.
Therefore, the instrument is termed highly reliable. Descriptive statistics were used to analyze
the responses of respondents while formulated hypotheses were tested with product moment
correlation coefficient and ordinal logistic regression.
4. DATA AND RESULTS
During the course of the study, four hundred and ninety nine (499) copies of the
questionnaires were distributed to the respondents distributed among the firms and four
hundred and sixty eight (468) were returned and were validly filled. The average return rate
yielded 93.1%. This is acceptable and justifies the use of the data for further analysis.
Table 1 The relationship between the bargaining power of suppliers and firms’ productivity.
Questions SD D A SA U Total
Firms’ environment can influence supplier
behaviour.
52 36 159 219 2 468
Suppliers bargaining power is central to firms
survival.
45 54 147 222 - 468
A cordial relationship between suppliers and
firms engender growth.
61 40 201 162 4 468
Productivity is determined by patronage of
customers.
22 39 222 185 - 468
A firm’s performance engenders productivity. 58 39 199 167 5 468
Total 446(44.6%) 1517(64.8%) 11(0.47%) 2340
Source: Fieldwork, 2018.
It is seen that in table 4.7, 446(44.6%) of the respondents fall into the disagreement
echelon, 1517(64.8%) fall into the agreement category while 11(0.47%) fall into the
undecided category. This practically implies that majority of the respondents averagely agree
that there exists a positive relationship between the bargaining power of suppliers and firms’
productivity.
Table 2 The effect of bargaining power of competitor on firm competitive advantage.
Questions SD D A SA U Total
Competition encourages progress and product
developments, it forces organization to be more
innovative and productive.
39 28 222 170 9 468
If the firms are unable to timely and appropriately
respond to this competition pressure, the financial
performance of organization could be adversely
affected.
22 36 198 212 - 468
Research give a product a competitive edge 20 25 223 196 4 468
Firm’s competitive position reduces the cost of
the output.
30 36 225 172 5 468
Market knowledge and product development are
tools to check competitor
41 37 158 227 5 468
Total 314(13.4%) 2003(85.6%) 23(0.98%) 2340
Source: Fieldwork, 2018.

Table 4.8 which is an analysis of the effect of bargaining power of competitor on firm
competitive advantage clearly shows that 314(13.4%) fall into the disagreement category,
2003(85.6%) agreement category while 23(0.98%) fall into the undecided category. This
means that majority of the respondents agree that bargaining power has significant effect on
firm competitive advantage.
The guiding hypotheses of the study were tested in this section of the study. To test the
hypotheses; the statistical tools used were ordinal logistic regression and correlation analysis.
Table 3 Descriptive Statistics
Source: Researchers’ Computation Using SPSS
The Pearson correlation analysis was carried out to ascertain the relationship between
bargaining power of suppliers and firm’s productivity. The Pearson correlation table yielded a
correlation coefficient of 0.923. This practically entails that there exists a positive correlation
between bargaining power of suppliers and firm’s productivity at the magnitude of 92.3%.
The probability values associated with the correlation analysis shows that the probability
values at 2 tailed tests yielded p = 0.000. Since the p = 0.000 is less than 0.05, we are
compelled to accept the alternative hypothesis that there is a significant positive relationship
between bargaining power of suppliers and firms productivity.
Descriptive Statistics
19.6603 21.09238 468
8.7073 12.25627 468
Bargaining Power
of Supliers
Firm's Productivity
Mean Std. Deviation N
Correlations
1 .923**
.000
207762.981 26966.455
444.889 57.744
468 468
.923** 1
.000
26966.455 70150.895
57.744 150.216
468 468
Pearson Correlation
Sig. (2-tailed)
Sum of Squares and
Cross-products
Covariance
N
Pearson Correlation
Sig. (2-tailed)
Sum of Squares and
Cross-products
Covariance
N
Bargaining Power
of Supliers
Firm's Productivity
Bargaining
Power of
Supliers
Firm's
Productivity
Correlation is significant at the 0.01 level (2-tailed).**.

Table 4a: Model Summary
Table 4a is a test of the explanatory power of the independent variables. The Nagelkerke
R-Squared which is also called pseudo R-Squared yielded 0.813. This basically entails that
approximately 81% of the variations in firm competitive advantage is accounted for by
bargaining power of competitor. This further entails that bargaining power of competitor
explains 81% changes in firm competitive advantage. This conclusively entails that the
explanatory power of the independent variable (Bargaining power of competitor) is high and
significant.
Table 4b: Variables
Table 4b is the logistic regression output showing the contribution and effect of
competitor bargaining power on competitive advantage. It can be clearly seen from the
regression output that the coefficient of competitor bargaining power yielded a positive
numerical coefficient at the magnitude of 17.332. This entails that a unit increase in
competitor bargaining power from 0 to 1 is associated with a 17.332 increase in competitive
advantage. The Wald statistics associated to e competitor bargaining power variable yielded
4.463 with a corresponding significant probability value of 0.001. Form table 4b, we see
clearly that the Wald statistics yielded a coefficient of 4.463 with a corresponding probability
value of 0.001. Since p = 0.001 < 0.005, we are compelled to accept the alternative hypothesis
that bargaining power of competitor has a significant positive effect on firm competitive
advantage.
5. DISCUSSIONS
The first hypothesis of the study anchored on testing if there is a significant positive
relationship between the bargaining power of suppliers and firm’s productivity. Pearson
correlation coefficient technique was adopted and it was discovered that there is a significant
positive relationship between bargaining power of suppliers and firms’ productivity. This
primarily entails that an increase in bargaining power of suppliers also leads to an increase in
firms’ productivity and vice-versa. This is in with the finding of Okpala (2012) who carried
out an empirical research on the effect of supplier’s bargaining power on the performance of
firms in Imo and Abia state. He employed the Chi-Square technique and found out that
supplier’s bargaining power positively contributes to firms’ performance. However, George
(2014) had a contrary finding as he found out that supplier’s bargaining power has a negative
Model Summary
9.763a
.011 .813
Step
1
-2 Log
likelihood
Cox & Snell
R Square
Nagelkerke
R Square
Estimation terminated at iteration number
20 because maximum iterations has been
reached. Final solution cannot be found.
a.
Variables in the Equation
17.332 8204.356 4.463 1 .001 3E+007
-21.203 8204.356 6.679 1 .000 .000
Competitor Bargaining
Power
Constant
Step
1
a
B S.E. Wald df Sig. Exp(B)
Variable(s) entered on step 1: Competitor Bargaining Power.a.

and insignificant effect on firms’ productivity in Nigeria. He used the logistic linear
regression to reach this conclusion. His study was based on selected industries in Lagos state.
The second hypothesis of the study set out to ascertain if bargaining power of competitor
has a significant positive effect on firm competitive advantage. Binary logistic regression was
estimated and used. The Wald statistics yielded a coefficient of 4.463 with a corresponding
probability value of 0.001. Given the result, the alternative hypothesis was accepted with a
conclusion that bargaining power of competitor has a significant positive effect on firm
competitive advantage. Michael (2010), Henry (2009) and Joseph et al (2011) had a similar
finding to this. Their studies tilted towards justifying that the bargaining power of competitor
significantly affects firms’ performance in Nigeria. There were no studies found to be
contrary to the existing findings.
6. CONCLUSION AND IMPLICATIONS
This study has been able to examine the effects of task environment on organization
performance of selected manufacturing firms in south east, Nigeria. Findings from the study
revealed that task performance on the average significantly and positively affects the
performance of the sampled organizations. The conclusion drawn from this finding is that the
performance of businesses is highly tied to task environment variables such as the bargaining
power of suppliers, bargaining power of competitors, bargaining power of customers, host
community and government policies. In other words, the performance of manufacturing firms
is significantly dependent on the alteration of the aforementioned task environment variables.
In lieu of that, the following recommendations were offered of the study. First, firms should
be committed in maintaining a cordial relationship with their suppliers and avoid possible
conflict in short and long-run. This can be sustained through the fixation of periodic meeting
between the firms and suppliers. Further, firms should be more strategic in managing their
competitors. This can be achieved through the advancement of blue ocean strategy. Also, the
synergy between customers bargaining power and firms competitive advantage should be
professionally maintained. This is because the customers are the heart of the business
existence. Lastly, the stability of a firm is strongly tied to the host community and its
environs. To maintain such stability, the firms should from time to time contribute to the
welfare and progress of the community. This can be in the form of hosting empowerment
programs for the people of the community and providing some infrastructural support.
This implication of this study is that it has revealed the effect of multifaceted dimensions
of task environment on performance of firms to managers of manufacturing firms and society
at large.. This study also revealed the individual relationship between the bargaining power of
suppliers and firms’ productivity as well as the bargaining power of competitor and firm
competitive advantage. It also gives insight into host community and its effect on firms’
stability. No research area is exhaustible. Therefore, the study suggests that further studies be
carried out in the area of the nexus between task environment and the service sector
productivity.
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