Human Capital Development and Performance in Garment Industries in Nigeria: Business Owners and Employees Simultaneous Development Perspectives

The development of firm employees may not be sufficient without simultaneous development of business founders’ intellectual capital because of the role business founders play in business strategy decisions and their increasing involvement in business operations. Prior studies seem to have ignored this important role of business founders in ascertaining the effects of human capital development in corporate performance by focusing solely on firm’s employees. This study proposed and tested human capital development from both business founders’ and employees’ perspective and determined how such simultaneous intellectual development can enhance firms’ productivity in garment industry in Nigeria. A survey research design method was employed and the data collected from 100 individuals who either owned or belonged to the top management team of Garment Industries in Nigeria was empirically tested using regression analysis. The result indicated that human capital development of business founders and employees positively affect firms’ productivity suggesting that firms that engage in simultaneous training of employees and founders performed better than those focusing solely on employees. Simultaneous training, educating, mentoring and learning capacity of both business founders and their employees can generate substantial returns to garment firms that can revitalize the industry while making them internationally competitive. The positive effect associated with simultaneous human capital development of founders and employees depends on good management efficiency as training the founders requires effective human development strategy. Generally, this effect suggests that human capital development should be given adequate attention and may not be value adding if business owners are not connected in the model of organizational human capital development

Corporate social responsibility intensity: Shareholders' value adding or destroying?

This paper examines whether an intensification of corporate social responsibility activities adds or destroys firms' value in Nigeria. Fixed effect regression analytic tool was used to analyze the data from a sample of 56 listed firms on Nigerian Stock Exchange (NSE) between 2009 and 2018. We followed environmental, social and economic responsibility activities rating based on Global Reporting Initiative (GRI) disclosure guidelines and Korean Economic Justice Institutes (KEJI) social responsibility efficient interpolation rating formula in the measure of firms' social responsibility. The study found that firms that engage in intensive social responsibility yielded positive and insignificant effect on firms' stock value. This implied that an aggressive social responsibility is not the best approach as it possesses the potential to destroy shareholders' value. On the other hand, we found evidence that medium social responsibility model significantly affected firms' financial performance (coefficient = 0.165; p-value >0.05), which suggests that the best social responsibility strategy that significantly increases shareholders' value is the middle course model. A further test showed that generally environmental, social and economic responsibility activities of firms significantly add to firms' market value (Coefficients = 0.028; 0.216; 0.037; p-values<0.05). However, the degree of the effect is contingent on the intensity of the activities and governance structures. Governance structure and board diversity explained firms' efficient CSR strategy that promotes middle course strategies while CSR aggressiveness is explained by unitary model of board leadership. Thus, implementation within an industry average performance adds significantly to investors' value provided that there is effective corporate governance structure

Absorptive Capacity, Business Venturing and Performance: Corporate Governance Mediating Roles

This study offers insight through Structural Equation Modeling (SEM) into the joint impact of corporate absorptive capacity and corporate new business venturing on the performance of manufacturing firms in Nigeria as moderated by the quality governance mechanisms. Using the structured survey design, and respondents' data from 330 employees of manufacturing firms, we provide evidence that both absorptive capacity and corporate new venturing entrepreneurship dimensions do not directly yield significant positive impact on firms' performance. Rather, the significant effect depends on the quality of the corporate governance mechanisms. Firms' absorptive capacity as measured by acquisition, assimilation (potential absorptive capacity), transformation, and knowledge exploitation (realized absorptive capacity) only resulted in value creation when mediated by key governance mechanisms including frequency of board meeting, and the presence of independent directors. Similar effect was detected on the effect of corporate new business entrepreneurship dimensions including innovation, proactivity, new business venturing and strategic renewal on firms' performance in manufacturing sector. The path analysis showed that optimal board size, frequency of board meeting and the presence of independent directors jointly shape the way corporate new business entrepreneurship dimensions affect firms' performance. By implication, weak governance occasioned agency problems that reduce the potential of corporate entrepreneurship to influence corporate financial performance positively. Overall, firms that wish to reap the benefit of knowledge management and new business venturing should develop their governance structures. Thus, board size and independent directors are expected to be optimal to enhance and achieve sufficient monitoring while frequency of board meeting should be given a priority to encourage knowledge sharing that will translate into higher financial performance