DIFFUSION AND ADOPTION OF INFORMATION AND COMMUNICATION TECHNOLOGIES IN THE MANAGEMENT OF THE NIGERIAN NATIONAL PETROLEUM CORPORATION AND ITS SUBSIDIARIES

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

trial T

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.

₦5,000.00 – DOWNLOAD FULL PROJECT DOWNLOAD FULL PROJECT Added to cart

---

---

---

---

Related Project Topics :