Effect of Government Regulation on Banking Employees in Nigeria - Research Paper Example

Declaration I declare that I am the only of this dissertation and I permit the of to use this paper for the aim of scholarly research and to lend it to other institutions for the same purpose. (Signature) (Date) EFFECT OF GOVERNMENT REGULATION ON FIDELTY BANK EMPLOYEES IN LAGOS NIGERIA (Author’s name) (Institutional Affiliation) Key words: Government regulation, banking employees Contents a. Introduction--------------------------------------------------------------------------4 b. Literature Review-------------------------------------------------------------------4 c. Objectives----------------------------------------------------------------------------6 d. Methodological/Philosophical Stance--------------------------------------------7 e. Approach-----------------------------------------------------------------------------8 f. Strategy-------------------------------------------------------------------------------9 g. Time frame--------------------------------------------------------------------------10 h. Data collection and Analysis------------------------------------------------------10 i. Sampling-----------------------------------------------------------------------------10 j. Ethical and Access Issues----------------------------------------------------------11 k. Time Plan----------------------------------------------------------------------------12 l. References---------------------------------------------------------------------------13 Introduction The banking system in Nigeria has been able to undergo various radical changes for many years since the time of independence. The extensive intervention by the government that is characterized by many financial sector policies that began in 1960s and later intensified in 1970s had the objective of influencing resource allocation and promoting indigenization. This is subject to achieve by analyzing a number of factors affecting the employees following the introduction of government regulation in commercial banks across Nigeria, especially Fidelity Bank Group of Banks located in Lagos through years coinciding with those time lines. Historically, banking regulation is as a result of bank failure and crisis and is aimed at offsetting the impacts of the crisis, such as the 2008 global financial crisis. Banking regulation ensures the stability of the financial sector of the economy, through the adoption of prudent measures facilitating system efficiency and stability and protecting the banking sector from systematic risk. Despite having such issues as the guiding principles, it is apparent that such regulations end up affecting various banking employees in general across the country. The thus paper aims to establish the impact that the government regulation in Nigeria has on the banking employees, especially by focusing on how it has affected Fidelity Bank employees in Lagos. Literature Review As a growing economy, Nigeria’s banking system is very unique and is therefore subject to regulation at a higher level than any other sector of the economy, leading to a situation where the banking industry is more regulated than other commercial sectors in the industry. For example, the implementation of a uniform fiscal year for all commercial banks has had a number of effects on the employees of banks. By looking specifically at the Fidelity Bank Groups employees across Lagos, most of them were able to indicate a number of negative effects relating to the introduction of government regulation on the banking systems. These effects include reduced access to credit funds and loans, stricter policies regarding employee gratuities and pension funds, which have a negative impact on the output of the funds. In addition, most of these employees point out that government regulation plays a role in reducing the inefficiencies in the banking system. It implies that the employees’ redundancies are solved by the implementation of automated financial systems, which have an adverse effect on employee jobs, often leading to loss of jobs (Freixas 2008). Looking at the general impacts of government regulation to the banking employees in Nigeria, it is apparent that it affects many sectors of the economy such as employment. However, only analyzing the effects of banking regulations in terms of employment effects leads to a situation where the implications are viewed in a distorted manner. The same concept is especially true if you consider the fact that a lot of banking regulations have the explicit effect of developing certain industries and improving the general status of the economy. In fact, banking regulation is responsible for economic growth and development, while cases of economic downturn like the U.S bursting of the housing bubble was primarily caused by the erroneous belief in the self-regulation nature of the financial markets and deregulation (Harrison 2010). The central/federal government is responsible for controlling and managing the actions of the central bank, which in turn is responsible for regulating the activities of all the commercial banks and its employees (LaBrosse 2011). However, contrary to the stance above, there are those that argue against the positive impact of government regulation especially in terms of its effects on banking employees. They argue that government regulation inhibits economic growth and is responsible for damaging job creation opportunities in the economy. Banking employees are part of the larger group of total employees in the economy. Therefore, an analysis of the effect of government regulation on the total number of employees in the financial sector can be used to partly investigate the impact that government regulation, through the central bank, has on banking employees. It is also important to understand the nature of the labour market in today’s world in relation to how it is generally affected by government policies and regulation. However, it has been argued that this ongoing development should not be used as a reason for rallying against regulations aimed at weakening the government tools of regulation (Laeven 2008). It has thus led to the conclusion that evidence generated from government regulation and the correspondent effect on employment in general, shows that regulations do not have a significant impact on job creation and consequently on banking employees. In fact, it has been argued that placing stress on deregulation can lead to economic dislocation, meaning that regulations have a more moderate impact. The benefits of these outcomes are trickled down to other sectors of the economy like safety and health. In Nigeria, the central bank is used by the central government to enforce regulation policies such as the consolidation of the banking industry. The Central Bank of Nigeria, courtesy of the federal government, has been used to deal with issues relating to bank failure and distress, coupled with the government’s initiative of repositioning the banking industry in order it can be able to cope with economic challenges at both the global and national level (Ogbeidi 2009). The consolidation of the banking industry in Nigeria, which is a government regulation tool, has been touted as having broader structural effects on the Nigerian economy and specifically on the general banking industry. economic scholars also are in acceptance that formulating the economic policy that bases upon the classic theories of the economic development are no longer serving the idea reasons for framing such policies. Most of the Fidelity Bank Groups employees in Lagos argue that there is need to introduce institutional and regulatory reforms to the government’s participation in regulating the banking industry. There are additional operational problems, which are affecting banks and other financial institutions in Nigeria before the move to consolidate the banking industry was implemented. This highlights the fact that consolidation is not the solution to the inherent problems in the Nigerian banking industry. The wider structural effects refer to the impacts of the consolidation of the banking industry on the whole economy of Nigeria and its employment situation, especially with regards to its employees in the banking and financial sector (Ola 2013). A more comprehensive analysis of the prevalent issues, before the consolidation/ regulation of the government on the banking industry, is the key to identifying the impacts. Aims/Objectives of the Research 1) To discuss the impact of government regulation on Fidelity bank employee’s morale in Lagos and Nigeria in general. 2) To highlight the relationship between government regulation and the Fidelity Bank Group and other banking sectors in Nigeria. Methodological/Philosophical Stance The choice of stance on the investigation process is not straight-forward because even though the objectives of the study can be accomplished by generally adopting a positivistic view, an interpretivistic view is also required (Larrivee 2014). With regards to the impact of government regulation on the jobs of employees in the banking sector, a positivistic stance is more appropriate, since the outcome of the investigation can be quantified and is objective (Caldwell 1982). The final objective is also quantifiable, since investigating the relationship between government regulation and the banking sector can be collected by analyzing the figures relating to the years when government regulation was introduced in Nigeria and its impact on the banking sector, in terms of output and growth. A good period for analysis is during the global financial crisis period, when the government imposed regulation measures on the banking sector. When investigating the impact of government regulation on banking employees’ morale in Nigeria, especially by focusing on Fidelity Bank Group employees in Lagos Nigeria, an interpretivistic view is more appropriate, due to the subjective nature of quantifying morale. Trying to measure morale is subjective since there is no standardized tool for measurement, with the only way being through the opinions and perceptions of the employees regarding government regulation. Their opinions will be based on outcomes such as loss of jobs, reduced pensions and gratuities, and early retirements. However, the study will generally adopt a positivistic view due to the general and representative focus that the dissertation is going to take. Approach A deductive approach is best suited for this research, since during the investigations I will initially analyze the broader issues, such as the impact of government regulation on the entire banking industry in Nigeria, in order to have a better understanding of the workings of the Nigerian economy and the banking industry. Due to the comprehensiveness of the information obtained, I will then be able to understand the more specific factors, such as the banking employees and how government regulations have an impact on not only their morale, but also their livelihood (jobs, pensions, gratuities and salaries). In addition, a deductive approach enables the researcher to test the goals/objectives of the study more appropriately and accurately, as he/she collects the necessary information for addressing the objectives of the study and proving whether the hypothesis is true or false (Kelley 1998). Furthermore, I have already identified the objectives/goals of the study. However, a purely deductive approach is not permissible, meaning that in some instances, I may have to adopt an inductive approach due to the nature of social sciences (management). Since this topic has already been researched before, I intend to undertake a descriptive research as I aim to add more information on the topic (Vogt 2011). The main aim of the research is to discuss and describe the impact of government regulation on the employees of the banking industry in Nigeria. In addition, a descriptive approach will enable me to describe the impact with more detail, add more information on the subject and explain the relationship between government regulation on banking employees and the entire banking industry in Nigeria, in terms of its subsequent growth and development. A thorough descriptive research will enable me to develop a comprehensive model that can be able to predict certain phenomena. I will also adopt an explanatory research, which is guaranteed to provide me with detailed information. However, I intend to explain and link ideas, such as the relationship between governmental regulation and the banking sector in accordance with the objectives of the study. Strategy I will adopt a qualitative strategy for the dissertation. Qualitative data will be subject to gather by reviewing and comparing many responses from the past researches, which will then necessitate the collection of statistical data. The qualitative strategy will be used when trying to describe and discuss the impact of government regulations on the banking employees, in reference to their morale, which is highly subjective (Denzin 2005). This will be subject to achieve through written material in the form of scholarly journals, books, economic publications, narratives and online internet sources. A qualitative research will enable me to gather statistical data on how government regulation impacts on banking employees, by investigating the number of banking jobs present before and after the introduction of the regulation, and the general views from the employees regarding government regulations on the banking industry as a whole. In order for the research to be conclusive there is need for some numerical evidence, further highlighting the need to use a qualitative strategy (Creswell 2009) The research will rely on secondary data sources due to the availability and accessibility of material through online sources for example. As indicated earlier, there is a lot of prior information on this research topic, which makes it easy to collect data unlike primary sources (interviews and firsthand accounts of events), which are very hard, especially when considering the fact that the research is investigating the effects of government regulation on a foreign country (Nigeria). Another possible approach for collecting data could be employing the use of primary data. The data will be subject to obtain by involving limited participants in the process, with the sample size not exceeding 20 participants. These participants will answer short questionnaires on site and it will base on their availability and willingness to participate in the excise. However, this approach will be subject to use when there is adequate time and resources for collecting primary data ready at disposal. On the situation where the time frame of completing the research is limited, it becomes advisable to use secondary sources which take shorter periods of time to gather and access data. Time frame This research is best suited to a longitudinal methodology, which will enable me to record data on existing information on employee attitudes towards government regulation, the number of jobs before and after regulation and the general effects of government regulation on the banking industry in Nigeria. A longitudinal study will enable me to compare contrasting population groups such as the number of jobs lost in the banking industry in Nigeria before and after government regulation of the banking sector (Ruspini 2002). In addition, a longitudinal study will enable me to compare numerous variables of the impacts of the employee over a period of years, by focusing particularly on Fidelity Bank Group employees in Lagos, Nigeria. Consequently, I will be able to have a more in depth understanding of the relationship between variables such as government regulation and its impacts on the growth of the banking sector, thus identifying a cause and effect link. Data Collection and Analysis My primary source of data will be through secondary sources, which include online materials, books, academic and scholarly journals, websites and dissertations form other researchers. Therefore, I will employ the case study data collection tool (Bradley 2010). The reason for the adoption of this tools is due to the unique nature of the dissertation which involves investigating the relationship between variables in a foreign nation (Nigeria) making it very hard and expensive to apply other research tools like questionnaires, observation and interviews. It’s the most appropriate way to conduct the research as it will also facilitate an easy analysis of the variables. The alternative source of primary date will be conducting short interviews with readily available Fidelity Bank Group employees in Lagos. The same tool of case study data collection will be subject to use in conducting data analysis. Sampling The best sampling strategy for this research is simple random sampling due to its user- friendliness and lack of biasness in selecting the sample in a scientific and random manner. The sampling method will be used to choose the most appropriate number of banks and employees to analyze in order to identify their impacts and perceptions. Due to the vastness of the available data, a fairly large sample will be selected to be a representative of the entire population of employees and banking institutions. Random sampling is most suited to this research because of its scientific approach in selecting the samples, thus enhancing the credibility and reliability of the results while also minimizing the amount of work (Leary 2007). It is achieved by adopting an adequate sample size that is a representative of the entire population of the banking employees and the banking sector. I will choose major banks and identify the number of jobs lost or gained in the years before and after the introduction of government regulation, coupled with the corresponding data on other factors such as the effects on pension funds and gratuities. Ethical and Access Issues Since I will be accessing some information from online sources, some of the ethical issues I am bound to encounter include matters of privacy on materials available in the internet and informed consent from the authors of the material (Kitcher 2011). The lack of a clear distinction between private and public spaces is an ethical issue in online research. The best way to deal with this ethical conundrum is referencing and citing information gathered from secondary sources to avoid propagating plagiarism. Possible access issues include restricted access to certain online sites and institutional websites, courtesy of laws protecting private and public sector information and which not only delay the research period but also reduce the overall quality of work. However, other alternative methods could be used, like accessing the material in the school library or obtaining an account to some of the restricted sites. In case of sensitive information, there will be need of employing a generalization approach while presenting views and conclusion on specific issues. All the information will be subject to reference in accordance for the reasons of upholding honest, clarity, and the entire research ethics. Time Plan The key stages of the implementation plan include- a background stage, a discussion stage and then a summary stage. Below is a summary of a Gantt chart to illustrate the key implementation stages and the assigned earliest and latest time frames for the completion of the task. The limitations for completing each section of research are illustrated by the red line extension. TASK DATE                       29th April 30th April 1st May 2nd May 3rd May 4th May 5th May 6th May 7th May 8th May 9th May Background                   Discussion                       Summary                       References Bradley, N., 2010. Marketing research: Tools & techniques (2nd ed.). Oxford: Oxford University Press. Caldwell, B., 1982. Beyond positivism: Economic methodology in the twentieth century. London: Allen & Unwin. Creswell, J., 2009. Research design: Qualitative, quantitative, and mixed methods approaches (3rd ed.). Los Angeles: Sage. Denzin, N., 2005. The SAGE handbook of qualitative research (3rd ed.). Thousand Oaks: Sage Publications. Freixas, X., & Rochet, J., 2008. Microeconomics of banking (2.nd ed.). Cambridge, Mass. [u.a.: MIT Press. Harrison, F., 2010. Boom-bust: House prices, banking and the depression of 2010 (2nd updated ed.). London: Shepheard-Walwyn. Kelley, D., 1998. The art of reasoning (3rd expanded ed.). New York: W.W. Norton. Kitcher, P., 2011. The ethical project. Cambridge, Mass.: Harvard University Press. LaBrosse, J., 2011. Managing risk in the financial system. Cheltenham, UK: Edward Elgar. Laeven, L., & Levine, R., 2008. Bank governance, regulation, and risk taking. Cambridge, Mass.: National Bureau of Economic Research. Larrivee, D., & Gini, A., 2014. Interpretivistic Quantification: Tool for Enhancing Quality of Life (1. Aufl. ed.). Saarbrücken: LAP LAMBERT Academic Publishing. Leary, Z., 2007. The social science jargon buster the key terms you need to know. Los Angeles: Sage Publications. Ogbeidi, M., 2009. Regulation through legislation: Government and the insurance industry in Nigeria 1961-1987. Lagos, Nigeria: First Academic. Ola, O., 2013. Copyright collective administration in Nigeria lessons for Africa. Berlin: Springer. Ruspini, E., 2002. Introduction to longitudinal research. London: Routledge. Vogt, W. (2011). SAGE quantitative research methods. London: SAGE. Read More