CHAPTER ONE
INTRODUCTION
- Background to the study
Government, Business and Society interrelationships and responsibilities to each other. Various views exist on the relationship that exists between business, government and society and the expectations from each by the other. Post, Lawrence and Weber (1999) posit that businesses exist primarily to provide good standards of service and products o the society as well as conform to basic societal rules, norms or values. Other responsibilities include obeying the laws laid down by government to guide or regulate their activities as well as, paying taxes to government.
This is to say, Government, business and society exist as a continuous symbiotic interactive system where, each has rights and owes responsibilities to the other two and all are highly dependent on each other for continued existence and relevance. Businesses like all living beings interact with other forces around them and their actions have effects on society and government; just as government actions have on Businesses and society. Both of them in their different ways interact with, affect and are also affected and influenced by the larger Societies in which they exist.
According to Blugh (2010), every legitimate government derives its power from the people (the Society) it governs. He further argues based on the Constitution of the United States of America that, the legitimate grounds for a government’s existence hinges on mutual defense of rights and mutual decision by deliberative assembly. They in turn therefore, owe the society/public a responsibility to protect them from unethical practices of some businesses by enacting government regulations to that effect; they protect the environment, human rights and other social interests. This they try to do through the different ways or control machineries and government agencies they employ. The government here can either be at the Local, State, or Federal levels.
The government responsibility however does not start and end with the society. It owes businesses also, the responsibility of providing a favourable environment for them to thrive in – peace, security and “fair” laws and taxes. In the words of Olebune (2007), “In any government-business relations, the question is, how can the government create an environment in which businesses are naturally motivated to make the right long-term investment decision choices?” This means the government has to put in place the right regulatory and legal framework to guide growth of all industries in the business area. In essence, the government is responsible for protecting the rights of both businesses and society such that the quest of self-interest by either party would not have adverse effects on the other.
Some businesses in a bid to remain in business and continually make profit, engage in some unscrupulous practices which are detrimental to their host environments, represented by the consumers. These are the main stakeholders in every business. The customers or consumers are the major stakeholders in any business organization, and they represent a very large proportion of the society. Stakeholders are defined in Post et al. (1999), as all the people and groups affected by, or that can affect an organization’s decisions, policies and operations.
Businesses therefore owe them a duty to behave in a communally responsible and approachable manner towards them. When a business organization fails in this respect, the customer has a right to register his or her displeasure through complaints.
Consumer complaints should be recognized by an organization and the government as a part of business, because they have beneficial effects for the organization and its products. It is a kind of control measure by which businesses and organizations are made to realize where they have fallen short of customer expectations and see the need to restore consumer confidence in them and their products (Ayozie, 2013). This study is aimed at examining how efficiently a government regulatory agency in Nigeria, The National Agency for Food and Drugs Administration and Control (NAFDAC) is fulfilling its purpose of regulating businesses and protecting consumers.
1.2. Statement of the Problem
Blugh (2010) posits that every legitimate government derives its power from the people, therefore its existence centres on mutual defense of rights and mutual decision by purposeful association. This means, since they were put in place by the people, they in turn owe the society/public responsibilities which includes, protecting them from unethical practices of some businesses by enacting government regulations to that effect.
Olebune (2007) agrees with this position when he argued that the government has to put in place the right regulatory and legal framework to guide growth of all industries in the business area. In essence, the government is responsible for protecting the rights of both businesses and society such that the quest of self-interest by either party would not have adverse effects on the other, through regulations.
The Organization for Economic Cooperation and Development (OECD, 2010) defined Regulation as any instrument by which governments, their subsidiary bodies, and supranational bodies (such as the European Union or the World Trade Organization) set requirements on citizens and businesses that have legal force. The main aim of regulatory policies is to guarantee that the regulatory control works efficiently, so that regulations and regulatory structures are in the public interest. The organization also believes that these regulations and structures should address happenings in the private sector, as well as the public establishments and government agencies. This is because they are important in determining what happens in the economy and the society at large. To achieve this, structures must be put in place by the government to assess conformity or adherence to laid-down regulations. Also, attention should be paid to consumers’ needs and complaints to protect them from unethical practices of business organizations (OECD, 2010).
In Nigeria however, according to Ekanem (2011), the prevalence of fake, substandard, defective and adulterated products is alarming. The quality of services and goods rendered or available to the consumer leaves much to be desired as they are below the regulated standards. In addition, a report by NAFDAC in 2003 stated that the problem of adulterated and fake drugs was so bad that, neighboring countries such as Ghana and Sierra Leone officially banned the sale of drugs, foods and beverages products made in Nigeria (NAFDAC, 2003).
Nwaizugbo and Ogbunankwor (2013), posit that it is doubtful if regulatory agencies set up by government are achieving the mandate for which they were set up. They argue that records in Nigeria show that, consumers do not still know their rights and some who do are unaware of the particular agency to complain to. In addition, it is believed that some of these agencies are ill-equipped to provide adequate surveillance in eradicating fake and substandard products from Nigerian markets. As a result, studies by Alabi, 1996; UNODCCP, 1999; Mambula, 2002; Daily Independent, 2010 (in Nwaizugbo and Ogbunankwor, 2013) concluded that Nigerian consumers are the most abused in Africa.
1.3. Objectives of the Study
This study is aimed at assessing the impact of administrative structure on organization efficiency. A study of national agency for food and Drugs administration and control. (NAFDAC)
The aim at determining how efficiently the government in Nigeria is fulfilling its responsibility to the society (here represented by the consumers), in protecting them from the unscrupulous activities of businesses, through a government regulatory agency. The government agency chosen for this study is the National Agency for Food and Drug Administration and Control (NAFDAC).
The specific objective is to:
- Assess how the consumers know or feel that it is a responsibility of the government of a nation to protect them from unethical business practices through regulations.
- Assess the extenton how NAFADC made itself known or educated the Public on their existence and functions.
- Assess how consumers derive any benefit from the existence and activities of NAFDAC.
- Assess the extent on how the consumers feel that NAFDAC has fulfilled the purpose of its existence
1.4 ResearchQuestions
the following questions would need to be answered.
- Do the consumers know or feel that it is a responsibility of the government of a nation to protect them from unethical business practices through regulations?
- To what extent has NAFADC made itself known or educated the Public on their existence and functions?
- Do consumers derive any benefit from the existence and activities of NAFDAC?
- To what extent do the consumers feel that NAFDAC has fulfilled the purpose of its existence?
1.5 Research Hypotheses
- Ho:Routine inspection and market surveillance are not quality management methods used by NAFDAC to ensure compliance with standard specification
- Hi:Routine inspection and market surveillance are quality management methods used by NAFDAC to ensure compliance with specifications.
- (2)Ho: The extent to which the Nigerian manufacturing sector adopts quality management practice is not high.
- Hi:The extent to which the Nigerian manufacturing sector adopts quality management practice is high.
- Ho:The extent to which NAFDAC achieves its objectives on the Nigerian manufacturing sector is not high.
- Hi: The extent to which NAFDAC achieves its objectives on the Nigerian manufacturing sector is high.
- Significant of the study
This study is needed because though there have been various studies on consumerism, studies on government regulations for consumer protection are few. Also, it is justified considering the fact that, the main aim of a regulatory policy is to guarantee that the regulatory control (agencies or tools) works effectively and that they are in the interest of the public (OECD, 2010). Studies to ascertain if this is the case with government regulatory agencies in Nigeria are almost non-existent.
This study is significant as it would attempt to ascertain if the government is fulfilling its duty of providing protection for the consumer, by assessing the efficiency (from the viewpoint of the external stakeholders, mainly represented by the consumers) of NAFDAC, one of its regulatory agencies set up for that purpose. Where the result is negative, the government would see the need to put control measures in place, to address the anomaly.
Finally, the study is essential to future researchers who intend to research on this topic again.
1.7 Scope of the study
In Nigeria, this is the responsibility of the Federal Ministry of Health. Within the ministry and until 31st December 1992, that responsibility devolved on the department of Food and Drugs Administration and Control (FDAC). The birth of the National Agency for Food and Drugs Administration and Control (NAFDAC) as a parastatues of Ministry was necessitated by the need to overcome a number of difficulties which had militated against the attainment of the goals of the former FDAC department. These difficulties arose from the encapsulation of the department within the ministry and were inevitably linked with the normal bureaucratic ministerial positions which are manifest in:
Slow mobilization of ideas, men and materials for productive work, inadequate resource acquisition utilization and management, slow disciplinary and poor reward system and poor funding of activities necessary for effective design and implementation of programmes.
They are traceable to a lack of awareness by the public in practical terms of the sensitivity and relevance of matters concerning control measures on food drugs cosmetics water and chemicals to both preventive and curative health care. Such control measures when executed successfully provide guaranteed saving of a high percentage of the expenditure by the government and individual to cure or relive illness.
Another very important reason for the establishment of NAFDAC was the need to separate the control functions of the former FDAC which relate to inspection, product registration and regulations, as well as evaluation and control of product quality from its functions relating to the production, procurement, supply and distribution of drugs.
NAFDAC was thus established by Decree No 15 of 1993 (commencement data 1st October, 1992) as a parastatals of the Federal Ministry of Health to carry out among other things, all the control functions of the former FDAC while the service functions remain within the ministry.
