Planning Flexibility, Environmental Uncertainty and Organizational Performance of Selected Oil and Gas Service Firms in Lagos and Rivers States, Nigeria

The need for organizations to wade through environmental uncertainties have recommended to management of firms in the oil and gas service industry in Nigeria, the necessity of employing planning flexibility in running the affairs of their organizations. However, oil and gas service companies operating in Nigeria faced problems of inflexible planning practices and poor management of environmental uncertainty. These problems have negatively affected their performance. This study examined the effect of planning flexibility and environmental uncertainty on performance of selected oil and gas service firms in Lagos and Rivers States, Nigeria. This study employed survey research design. The target population comprised 9,324 oil and gas service companies operating in Lagos and Rivers States. A multi-stage sampling technique was adopted to select the sample size of 733 using the Cochran (1997) formula. The Cronbach’s alpha ranged between 0.784 and 0.884. The response rate to the 733 copies of the questionnaire administered was 93.7% and data was analyzed using inferential statistic. Finding revealed that the combination of environmental uncertainty and planning flexibility significantly affected firm performance of the selected oil and gas service firms (R2 = .252, F(2/683) = 32.905, p<0.05). The study concluded that planning flexibility and environmental uncertainty enhances firm performance through improved profitability, sales growth and market share of oil and gas service firms operating in Lagos and Rivers States, Nigeria. It is recommended that oil and gas service firms in Lagos and Rivers States, should continually strive to inculcate planning flexibility behavior that will enhance firm performance.

Keywords: Firm performance, Planning flexibility, Environmental uncertainty, Oil and gas service firms