Academic journal article International Review of Management and Business Research

Equipment Leasing and the Span of Control Management: Study of the Industrial Sector of Nigeria

Academic journal article International Review of Management and Business Research

Equipment Leasing and the Span of Control Management: Study of the Industrial Sector of Nigeria

Article excerpt

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Lessors provide equipment leased by the lessees, as well supply maintenance services as ancillary offerAdebisi (2003). The activity allows the lessee as a marketer the use of the derived services of the leased equipment as required for consumer satisfaction and (at) profit, as well releases fund that ought to have been tied to equipment acquisition for improved working capital management.

Firms as a matter of necessary must adapt to changes in consumers demands and to new sources of competition-Bateman and Snell (1999). This is especially so because products do not sell as long as the producers desire; given market competition. INNOVATION like Speedy delivery and Quality is technology based. These technologies are cheaper acquired through leasing compared to hire purchase or outright purchase. Thus leasing is an advocated option for consumer satisfaction at profit.

For maximized competitive advantage, consumer satisfaction and enhanced corporate profitability, the marketers must lease for low cost operations, speedy delivery, quality in offer and innovativeness, given reasonable span of control in operations. Thus, leasing ensures efficiency through reduced span of management responsibility referred to as span of management or control.

Theoretical Frame Work of this Study:

Globally, competition is inter and intra industrial, thus it is generic. Ability to satisfy the customer as market target is an influential factor in the drive to create positive difference between marginal revenue and marginal cost as source of profit.

A basic approach to cost reduction in organizations all tilings being equal is the achievement of the "limited span" concept through decreasing effectiveness per person (units of operation) supervised and increasing effectiveness per person supervised for margin of safety of constant effectiveness per person (units of operation) supervised-Van Fleet and Bedevian (2001). Constant effectiveness per person (units of operation) supervised often referred to as limited span or optimum span discourages "too large" or "too small" number of persons or units of operation under each supervisor-Rue (1974) and Reid (1970).

To achieve this "optimum span" of management (control) responsibility, it is advocated that organizations in technology based productive activities should increase their span of control effectiveness through reduction of member of operational units under the managers' control through dependency on lessors for productive technology/equipment for derived services of equipment.

This organizational view of span relationships-House and Miner (1969), Pondy (1969), Business Week (1972) and 1973) and Scott (1972), believe is possible based on corporate ability at creating harmony between administrative cost, productivity, effectiveness of supervision and employee's job satisfaction for overall corporate objectives (effectiveness) actualization-Harrison (2004) and Hendrichs (2001). This work is of the opinion that leasing of production technologies will reduce reasonably the number of operational units under the supervision of the manager, thus effectiveness is enhanced.

Objective of the Study:

This work lias the objective of showcasing equipment leasing as a strategic option for enhanced consumer satisfaction and corporate profitability based as the concept and philosophy of corporate span of management (responsibility) control.

Significance of the Work:

Literatme abound on the theory and practice of managerial span of (responsibility) control-Albanese (1975). Baker and Davis (1957), Bell and McLaughlin (1976), Cook, Adcock and Charlesworth (1966), Dale (1965), Edmunds (1999), Hellriegel and Slocum (1974), Johnson (1974), Kaufman and Seidman (1970) Koontz (1962), Leavitt and Whisler (1958), Mackenzie (1974), Najiar (1971), Quclii and Dowling (1974), Park (1965), Thompson (1974), Urwick (1974), Van Fleet (1974) and Woodward (1965). …

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