ABSTRACT
This study aimed at investigating the need for the diffusion and adoption of Information and Communication Technologies (ICTs) in the management of Nigerian National Petroleum Corporation (NNPC) and its subsidiaries, with particular references to the four refineries. In seeking solutions to the problem raised, four, research questions were formulated. The study described how the theories of diffusion and adoption have been used in the field of information and communication technologies. The study brought to the fore critical issues relating to the ICTs prevailing in the NNPC and its subsidiaries. The study was not a comparative one, rather aimed at identifying common factors affecting the decisions to acquire external technology. The study identified that the existing refineries have produced below capacity caused by poor management. The study took a cross investigation of the structure of the downstream sector and highlighted investment opportunities in refining, marketing and petrochemicals. The study was conducted through survey, and archival studies were carried out to identify some of the technical changes and technological capabilities of NNPC and its subsidiaries. The archival studies concentrated on annual reports, audited accounts, engineering reports, memoranda and statistics of NNPC and its subsidiaries. Data used in this study was collected from primary sources through structured questionnaire and interviews with the users of ICT components. In all, 400 copies of questionnaire were distributed to the respondents and a response rate of 96.50 percent was obtained. The data collected were analyzed using Analysis of Variance (ANOVA) technique and chi-square for the test of hypotheses. Also a multivariate probity regression analysis was adopted for testing hypothesis four. The study provided empirical evidence that the adoption of ICTs in the NNPC and its subsidiaries were beneficial. The study concluded that the future of NNPC and its subsidiaries were perceived to be dependent on the development and the upgrading of technological capabilities. The study made modest recommendations, that appropriate laws should be enacted to protect Nigerian National Petroleum Corporation and its subsidiaries from Foreign competitors and that obsolete equipment for training should be scrapped.
CHAPTER ONE INTRODUCTION
1.1 Background of the Study
When oil was discovered in Nigeria, the country had very little human resources to manage and operate a sizeable modern petroleum sector. The Foreign Oil Companies and the Government played major roles in establishing the prerequisites for the establishment of linkages and minor change capabilities especially in developing human resources for the petroleum industry. At the onset, the oil companies supported the establishment of departments and appropriate curricula for the training of Nigerians on oil related technological, science and engineering disciplines in Nigerian universities. Scholarships were awarded in significant numbers for overseas study. Assistance was given for relevant programmes for training in technical schools. This was also extended to in-house training
programmes within the oil companies. The government’s effort to alleviate the shortage of
technicians led to the creation of Indus x
raining Fund (1TF) to promote and encourage
the acquisitions of skills in the industry. Since the creation of 1TF, encouragement was given to broad industrial training efforts to company manpower plans.
Against this backdrop, the researcher considered it necessary to investigate the diffusion and adoption of Information and Communication Technologies (ICTs) in the management of the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries. The advent of Information and Communication Technologies had a huge impact on the way organizations of all types and users did their work (Kuuti, 1996:177-178). What has become known as the Information and Communication Technologies (ICTs) revolution has improved efficiency and effectiveness in most sectors of the economy (OECD, 2002:30). By allowing organizations to create and analyze important new information, it changed the way major decisions were made (Rochelean, 1999:23-36). In both business and government, the growth of the internet and its related software has spawned new ways of conducting business developments in ICTs and has changed the way economic activities were organized. The impact could be traced in two ways. First, how the ICTs industry changed during the last few years and second, how ICTs have impacted on other economic activities such as manufacturing and services.
The beginning of the ICTs industry is traced to the birth of the internet in the late 1960s and the appearance of the Personal Computer (PC) in the 1970s (Adubifa, 1990: 24). Its development as currently understood actually picked up momentum in the early 1990s. Since then, ICTs have integrated computing, communications and graphics through digitalization. It thrived on websites with the use of broad-band optical fiber lines. It has already made headway into the wireless mode and are becoming more and more personalized. ICTs are a general purpose technology and have wide applicability in various manufacturing and services sectors. It has the potential to affect virtually all sectors of the economy by imbuing greater information and development content in products and processes (Saidam, 2003:13). More importantly, it has spawned new products and made existing products more versatile. The development of lCTs has emerged to become another factor dividing the developed and the developing countries. ICTs have transformed the world, its potential for reducing poverty and fostering growth has increased rapidly.
The Nigerian National Petroleum Corporation (NNPC) and its subsidiaries are unique in Nigerian oil industry. Ogudu (1997:10) emphasizes that petroleum products have played vital role in the Nigerian economy and generated over 90 percent of Nigeria’s Foreign
exchange earnings and 80 percent of federal government revenue. The NNPC and its subsidiaries have a long and chequered history, starting with mineralogical studies in 1903 by the Mineral Survey Company. In 1937, the forerunners of Shell Petroleum Development Company (SPDC) Shell D’Avey came to Nigeria and thereafter other oil firms followed. To ascertain the specialized information needs of the NNPC and its subsidiaries, maximum use of information and Communication Technologies became unavoidable.
It is known fact that Information and Communication Technologies have revolutionized the Information handling capabilities, especially in Information centers throughout the world, which resulted to massive investment in research aimed at making computer and telecommunication networks more efficient to cope with the increasing demands. All over the world, the development of science and technology has been recognized as a necessary condition for economic growth and social progress. In most developing countries, science and technology indicators have shown lower values than in other parts of developed countries (Wangwe, 2000:32). The relevance of coming to terms with the importance of science and technology at Nigeria’s development cannot be overemphasized. Adubifa (1990:24-26) makes the point when he defined technology policy as a framework consciously put in place for the purpose of acquiring and utilizing scientific and technological knowledge in order to achieve national development objectives. The effective performance of this framework, according to Dahlman (1989: 13-15) requires enormous amount of financial, human and organizational or institutional capability. To develop these capabilities, a nation need to have the appropriate policy, build the necessary institutions and structures, which should be sustainable.
David (1992:215-216) explains the rationale for institutional networking for technological capacity building. In his own view, co-operation ought to exist between esoteric research for the purpose of expanding the frontiers of knowledge and research directed towards the production of goods and services. The trend towards institutional networking for the pursuit of technological knowledge has been furthered by the greater availability of standardized procedures embodied in new instruments for generating and analyzing data, as well as by the availability of high speed digital communication networks for linking spatially separated researchers (Mansell and Weh 1998:18-19). It is important to note that appropriate information technology and political stability are vital for the growth and vitality of any nation’s economy. The presence of appropriate technology contributes to the operations of
organizations while the lack of it leads to poor performance of organizations. The lack of technology constrains the implementation of corporate strategies and policies.
In the eyes of many during long years that passed, the thought of Information and Communication Technologies in most part of the Nigerian economy was confined to traditional computer services and computer laboratories providing on most occasions, random and computer training that was not market based. For many, the establishment of such laboratories was the closest one got to Information Communication Technologies (ICTs), especially in the Non-Government Organization (NGO) sector. These days the very people who shared the traditional thoughts are thinking differently. Most are now convinced that ICTs without results are waste of time. Technology diffusion involves the dissemination of technical information and know-how and the subsequent adoption of new technologies and techniques by users (Tassey, 1992: 46-47). It focuses on reaching the entire society in accordance with its needs or in accordance with what technology could do to facilitate better results for the different sectors, resulting in collective economic growth and prosperity. The thoughts of Information and Communication Technologies diffusion were designed to lead to an elimination of the idea that ICTs are tools of the privileged and the favoured. A slogan such as “ICTs for all” is becoming a reality. Farmers, carpenters, doctors, engineers, managers and the society at large are required to make use of ICTs for their domestic and professional needs. A human development report (UNDP, 2003:65-67) identifies the needs to make available the benefits of new technologies, especially Information and Communication Technologies (ICTs) as one of the global goals to alleviate poverty.
1.2 STATEMENT OF THE PROBLEM
The thrust of this study is on the nature and magnitude of the diffusion and adoption of information and communication technologies in the management of the Nigerian National Petroleum Corporation and its subsidiaries. It is increasingly recognized that the development, adoption and diffusion of ICTs are key determinants to success or failure in the management of NNPC and its subsidiaries. In the transfer of technology, there exists divergence of interest between the host country, government and the foreign oil companies. The divergence of interest was borne in mind when contractual clauses pertaining to transfer of technology were negotiated or when they were being monitored during implementation. The product of this divergence of interest led to the emergence of aberrations of what was regarded as transfer of technology. In essence, the ability of any country to acquire oil technology depends on the degree of its openness to the inflow of foreign technology, and the training tailored to meet the specific technological needs of the NNPC and its
subsidiaries. It would be pertinent to find out if NNPC and its subsidiaries are capable of developing technologically in its operational activities in the context of the policies and institutional arrangements that have assisted the advanced countries to achieve technological capability in the management of the oil industry.
1.3 OBJECTIVES OF THE STUDY
This study shall attempt to investigate the nature of the diffusion and adoption of Information and Communication Technologies in the management of Nigerian National Petroleum Corporation and its subsidiaries. In this study, various policies designed to encourage the spread of Information and Communication Technologies will come under focus. To this end the following objectives shall be pursued.
1) To examine the core capabilities in NNPC production, investment, linkages and strategic marketing to see if they encourage ICTs adoption.
2) To study the impact of technical change and government economic policy on the performance and capacity of NNPC to acquire, develop and upgrade these technologies.
3) To investigate the need for strong, and dynamic technological adoption in achieving economies of scale and mass production.
4) To examine whether the telecommunication services in the NNPC and its Subsidiaries are effective as growth and productivity instruments.
1.4 RESEARCH QUESTIONS
In view of the above highlighted issues in the objectives of study, the following research questions were raised for purposes of guiding this study:
1. Do the core capabilities in NNPC and its subsidiaries on production, investment and strategic marketing encourage the adoption of ICTs?
2. To what extent do technical change and government economic policy affect the performance of NNPC to acquire, develop and upgrade these technologies?
3. To what extent is there the need for strong and dynamic technological adoption in achieving economies of scale in the operation of NNPC and its Subsidiaries?
4. To what extent are telecommunication services in NNPC and its Subsidiaries effective as growth and productivity instruments?
1.5 RESEARCH HYPOTHESES
In the course of this study, the following hypotheses were tested:
1. Ho: The core capabilities in NNPC and its subsidiaries on production, investment, and strategic marketing do not encourage the adoption of Information and Communication Technologies.
HA: The core capabilities in NNPC and its subsidiaries on production, investment, and strategic marketing encourage the adoption of Information and Communication Technologies.
2. Ho: Technical change and government economic policy do not impact heavily on the performance of the NNPC and its Subsidiaries.
HA: Technical change and government economic policy impact heavily on the performance of the NNPC and its Subsidiaries.
3. Ho: Strong and dynamic technological adoption does not facilitate the achievement of economies of scale in the operations of the NNPC and its Subsidiaries.
HA: Strong and dynamic technological adoption facilitates the achievement of economies of scale in the operations of the NNPC and its Subsidiaries.
4. Ho: Telecommunication services in the NNPC and its subsidiaries are not effective as growth and productivity instruments.
HA: Telecommunications services in the NNPC and its subsidiaries are effective as growth and productivity instruments.
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study cannot be overemphasized, when one considers the resultant effects of inadequate access of information and communication technologies in NNPC and its subsidiaries. The study will help to put the theory of diffusion and adoption of ICTs into practical application. This process will help to verify the claims of the theory and consequently come out with the strengths and weaknesses of the theory. This study has broken a ground in academics, thereby closing a gap in academic literature and as such a major contribution to knowledge. This study is also significant because it will create the much needed awareness of diffusion and adoption principles as a management concepts that NNPC and its subsidiaries should embrace in order to improve the quality of their services. The study is also important for encouraging the spirit of the adoption of new approaches
such as ICTs diffusion that undoubtedly provide long-term benefits and enhance local prospects and development.
The outcome of this study will serve as a blue print for policy-makers and stakeholders to chart the right course of action on the development of ICTs facilities and infrastructure in the NNPC and its subsidiaries. In addition, the study is expected to provide the basis for comprehensive information on the process of acquisition, availability and use of ICTs gadgets in the NNPC and its subsidiaries.
1.7 SCOPE OF THE STUDY
The study focused on Information and Communication Technologies (1CTs) diffusion and adoption in the NNPC and its subsidiaries. The subsidiaries used in this study consist of four refineries located at Port-Harcourt 1 and II, Warri Refinery and Kaduna Refinery. The scope of this study opened several discussions for further investigations.
1.8 LIMITATIONS OF THE STUDY
As one would expect, a research work of this nature involves numerous limitations. These limitations hampered the researcher’s effort to have an in-depth study of the subject matter and come out with far-reaching findings. Some of these limitations include:
1.8.1 Time Constraints
Time was really a big constraint in carrying out this research study. The researcher had to combine the collection of materials for the study with other academic activities. The study was not easy to carryout due to trips to distant part of the country and the huge financial burden involved.
1.8.2 Prejudice
This formed another major handicap for the researcher. There occurred a general apathy on some of the respondents which were either as a result of fear of being reprimanded by higher management or as a result of underlined “Nigerian mentality”, on the mere mention of the word research. This indisposition to the researchers was manifested in their unwillingness to give required information or deliberate giving of incomplete and misleading information. The hoarding of information was also on security ground. To the respondents, the researcher was yet another nuisance.
1.8.3 Financial Constraints
Financial limitations made the researcher to confine the research study only with NNPC and its subsidiaries. The cost involved in the collection of materials for the study was so enormous that the researcher sought for funding, especially from the University of Abuja.
These limitations notwithstanding, satisfactory efforts were made to ensure that the study was carried out under conditions that ensured scientifically valid conclusions.
1.9 DEFINITION OF TERMS
As a starting point in the study, the definition of certain terms is important in order to avoid possible conceptual confusion. This is important because terms like technology knowledge and social capability and others, which the researcher used in the present discourse, have their technical exactness within the context.
Technology: The term technology as used does not imply just machine. Dahlman (1989:13-
15) definition which was adopted refers to technology by people and/or institutions which enable them to convert available inputs into desired outputs at maximum efficiency level.
Technological Capacity Building: This refer to the dynamic and progressive process in which, human and institutional capability is developed and sustained by organizations, communities and nations in order to benefit from economic interconnection within the global system.
Knowledge: Knowledge is a general term used as the opposite of ignorance about science and technology and their application is to the production and distribution of goods and services. Knowledge is critical to progress and development. Lack of it mean the lack of capacity to even access existing knowledge available.
Technological Knowledge: This simply mean know-how. Those countries, which possess less of it are caught in the poverty bracket (World Bank, 1998).
Social Capability: By Social Capability is meant the level of general education and technical competence of the people.
Strategy: This refers to master plan, policy put in place to achieve long-term goals and objectives of an organization.
Management: This refers to the control and making of decisions in an organization. It is the process of dealing with people.
Organization: The activity of organizing a group of people, structure, material and financial resources, system in a tidy and efficient way for the purpose of achieving well defined goal and objectives.
Technological Strategy: This is the deployment of technology for competitive advantage with primary focus on the product line, the production process and competencies.
Process Technology: Process technology includes the technology required to process oil and gas and evacuate it to the terminus. Such process technologies include those used in inflow stations, multi-phase pumps, floating product storage and off-loading.
Information Technology (IT): This is the acquisition, processing, storage and dissemination of information and data by means of computers and telecommunications.
Acquisition: This is applied in place of technology transfer. It refers to all the stages from buying, introduction, applying, adopting, adapting, localizing, and developing through to diffusion.
Technology Transfer: This take place between two parties or individuals and explains only technical and financial issues and does not explain social and environmental aspect.
Diffusion: This refers to the stage in which a technology is selected or used by an individual or an organization. It also refers to the stage in which the technology spread to general use and application.
Internet Technology: This embody a number of technologies, namely, e-mail, database, chat rooms, information and education resources. The Internet exhibits many elements that constitute a culture or community, that is, language, symbols, rituals, interactions and other elements of communication.
This material content is developed to serve as a GUIDE for students to conduct academic research
DIFFUSION AND ADOPTION OF INFORMATION AND COMMUNICATION TECHNOLOGIES IN THE MANAGEMENT OF THE NIGERIAN NATIONAL PETROLEUM CORPORATION AND ITS SUBSIDIARIES
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