Defensive Strategies and Firm’s Demise Avoidance: Evidence from Selected Oil and Gas Companies in Nigeria
Abstract
Defensive strategies aim at protecting a business strategies' competitive advantage. Defensive strategies strive at holding unto what the manager has, in addition to using competitive advantage to keep or sustain potential customers. The study attempted to empirically establish a relationship and extent of agreement between Defensive Strategies and Firm's Demise Avoidance in selected oil and gas companies in Nigeria. The study adopted a cross-sectional design and copies of Likert 5-type scaled measure questionnaire were administered to statistically selected 20 companies quoted in Nigerian Stock Exchange (NSE), operating in South-South and South-East geopolitical zones of Nigeria. The unit of analysis was at the organizational level, making use of 110 statistically selected top and middle-level managers occupying strategic positions in strategic departments or units. Descriptive and inferential statistical techniques were employed for the analysis of the generated data. The Pearson's Product Moment Correlation technique was employed and the Coefficient Statistic (r) was obtained with the aid of Statistical Package for Social Science (SPSS) Software, Version 20.0. There was a positive correlation and strong statistically significant relationship between dimensions of Defensive strategies (Retrenchment strategies and Divestment Strategies) and Firm's Demise Avoidance measure (Products and Services Value Enhancement). The paper therefore, arrived at the proven fact that the effective adoption of defensive strategies are strategic attempts to regain control of weakening business or preventing it from faltering in the first place, or temporarily restraining or stopping its operations. The paper recommends amongst others that, firms should strictly adopt feasible defensive strategies that will enhance the avoidance of organizational strategic demise.
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