Creating Value Under Uncertainty

Abstract

The business environment in Nigeria has been unstable and chaotic for many years. Inflation reached 100% in 1995 and frequent unpredictable changes in economic policies have destabilized the economic environment. Yet, some business enterprises have sustained a tradition of superior competitive performance, earning good returns on investment even as many environment wearied multinationals divest. The aim of this paper is to examine the actions taken by two successful companies to create value in Nigeria's uncertain business environment. The paper begins with a short summary of Nigeria's economic environment and its impact on manufacturing performance. It then reviews the principles of Economic Value Added (EVA) as a measure of corporate performance. The second part of the paper analyses the performance of two selected Nigerian companies-Nigerian Breweries Pic and Dunlop Nigeria Pic-and describes the strategies these companies used to achieve high and sustained corporate performance in Nigeria's economic environment. The paper ends with a discussion on the suitability of EVA-based performance measures in uncertain business environments.