




































American Interdisciplinary Journal of Business 

and Economics 
ISSN: 2837-1909| Impact Factor : 6.71 

Volume. 11, Number 1; January-March, 2024; 

Published By: Scientific and Academic Development Institute (SADI) 

8933 Willis Ave Los Angeles, California 

https://sadijournals.org/index.php/AIJBE| editorial@sadijournals.org 

 

 

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EFFECT OF INTERNAL ENVIRONMENTAL FACTORS ON GROWTH 

OF PHARMACEUTICAL COMPANIES IN SOUTH EAST NIGERIA 

 

 
Chime, Eric Chibueze1, Okechukwu, Elizabeth Uzoamaka2    and Nwekwo, Ngozi Mabel, Ph.D.3 

1&2Department of Business Administration, Faculty of Management Sciences, Enugu State University of 

Science & Technology 
3Accountancy Department, Faculty of Business Administration 

University of Nigeria, Enugu Campus 

DOI: https://doi.org/10.5281/zenodo.10822333 

Abstract: The study examined the effect of internal environmental factors on growth of pharmaceutical 

companies in South East Nigeria. Specifically, the study examined the effect of financial capability on profit 

growth of pharmaceutical companies in South East Nigeria; the effect of marketing capability on sales growth of 

pharmaceutical companies in South East Nigeria; the effect of managerial capability on employment growth of 

pharmaceutical companies in South East Nigeria. The study employed survey research design. The population of 

the study was all 270 management and senior staff of 10 pharmaceutical companies in Enugu and Anambra States. 

Since the population was not large, the whole population completed a structured questionnaire. Data were 

analyzed with Pearson Product Moment Correlation Coefficient (rs) with the aid of statistical package for social 

sciences (SPSS 20.0). The result showed that financial capability has a positive significant correlation with profit 

growth of pharmaceutical companies in South East Nigeria (correlation coefficient of .770); marketing capability 

has a positive significant correlation with sales growth of pharmaceutical companies in South East Nigeria 

(correlation coefficient of .828), managerial capability has a positive significant relationship with employment 

growth of pharmaceutical companies in South East Nigeria (correlation coefficient of .768). The study concluded 

that internal environmental factors have effect on growth of pharmaceutical companies in South East Nigeria. It 

was recommended that pharmaceutical companies in South East Nigeria should source for finance in order to 

implement strong financial strategies. 

Keywords: Internal, Environmental factors, Growth, Pharmaceutical companies 

 

Introduction 

1.1 Background of the Study 

The modern business manager operates in more dynamic and turbulent environment. The change in the 

environment has been rapid and unpredictable. Economic variables have been complex both in form and impact 

on the practice of business in Nigeria. Consumers and clients have been showing complex behaviours both in 



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local and international markets. The most dramatic change has been that exhibited by competitive pressures. 

Competitors have been applying one strategy or the other to adapt to the dynamic and unpredictable nature of the 

business environment (Adagba, & Shakpande, 2017). 

The dynamic environment in which a business operates provides opportunities for it to grow develop and create 

value and wealth. It also poses some threats to the business. The primary concern is how the business affects 

people and natural environment as it produces and sells products necessary to satisfy customers, stakeholders and 

other constituents. By building key stakeholder relationships among government agencies, consumer entities, 

environmental groups and other constituents, a business can anticipate and manage issues and concerns that might 

otherwise have gone undetected until they had grown into major problems. 

The most significant component in setting a company's direction and differentiating itself from competitors is the 

internal environment (Simon, Joshua & Mildren, 2014). This macro environment has a variety of qualities that a 

corporation can use to respond to the constantly changing external environment effectively. The internal 

environment of a corporation, in contrast to the external environment, is mostly controlled by management. 

Tangible business resources, people, management, competencies, production, marketing, and strategic decisions 

are all traditional components of any firm's effective and efficient functioning (Simon, Joshua & Mildren, 2014). 

Abera (2012) finds out the eight most important challenges which appear to affect the overall performance of 

MSEs include the following: inadequate finance, lack of working premises, advertising and marketing problems, 

inadequate infrastructures, negative management practices, and technological, entrepreneurial, and politico-legal 

problems which includes bureaucratic bottleneck system. The findings similarly point out that there exists linear 

and superb massive ranging from tremendous to the strong relationship located between independent variables 

and dependent variable (Islami, Mulolli, & Mustafa, 2018). The study found that internal business factors have a 

larger positive impact on a firm’s performance than industry factors. And in a study by Ibrahim and Harrison 

(2019), the results show that external factors, in particular, competitors’ marketing mix elements, have a greater 

influence on a company’s business performance than internal (marketing and non-marketing) strategy variables. 

1.2 Statement of the Problem 

Enterprises are subsumed in the environment with which they interact. The environment poses opportunities and 

challenges which may impact positively or negatively on business operations and performance. In fact, 

organizations and their environment are in mutually inter-dependent interaction with one another. An organization 

exists in the world of resources, opportunities, and limits. It can survive and thrive only when the environment 

desires its output of goods and services and is prepared to approve and endorse its activities. The available 

literature gives mixed results when it comes to the impact of internal business environment features on firm 

success. This study is therefore examined the effect of internal environmental factors on growth of pharmaceutical 

companies in South East Nigeria. 

1.3 Objectives of the Study 

The objective of the study was to examine the effect of internal environmental factors on growth of 

pharmaceutical companies in South East Nigeria. Specific objectives include: 

1. To examine the effect of financial capability on profit growth of pharmaceutical companies in South East 

Nigeria 

2. To examine the effect of marketing capability on sales growth of pharmaceutical companies in South East 

Nigeria 



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3. To examine the effect of managerial capability on employment growth of pharmaceutical companies in South 

East Nigeria 

1.4 Research Questions 

From the objectives, the following research questions were derived: 

1. What is the effect of financial capability on profit growth of pharmaceutical companies in South East Nigeria? 

2. What is the effect of marketing capability on sales growth of pharmaceutical companies in South East Nigeria? 

3. What is the effect of managerial capability on employment growth of pharmaceutical companies in South East 

Nigeria? 

1.5 Statement of Hypotheses 

From the objectives and research questions, the following hypotheses were postulated: 

1. There is no significant effect of financial capability on profit growth of pharmaceutical companies in South 

East Nigeria 

2. There is no significant effect of marketing capability on sales growth of pharmaceutical companies in South 

East Nigeria 

3. There is no significant the effect of managerial capability on employment growth of pharmaceutical companies 

in South East Nigeria 

1.6 Scope of the Study 

The study examined the effect of internal environmental factors on growth of pharmaceutical companies in South 

East Nigeria. The study concentrated on examining the effect of three environmental factors namely financial, 

marketing and managerial capabilities on three proxies of business growth namely profit, sales and employment 

growth. 

Review of Related Literature 

1.1 Conceptual Review 

1.1.1 Internal Environmental Factors 

Abolaji and Oni (2015) stated that the internal environment of an organization consists of factors related to the 

firm that influences its ability to achieve the stated objectives, and develop as well as implement feasible plans, 

which consequently contribute to its performance. The internal environment can also be described as internally 

controlled forces operating within the organization itself that has a direct impact on organizational performance. 

This includes financial resources, information and knowledge, corporate capabilities, incentives, organizational 

demographics such as the size of inter-institutional relationship, corporate objectives, and employee skills 

(Freeman and Reid, 2006 in Abolaji and Oni, 2015). Meanwhile, the research results of Bouazza et al. (2015) 

indicated that entrepreneurial characteristics, low managerial skills, lack of marketing skills, and low 

technological capacity are the major environmental factors affecting the growth of SMEs in Algeria. 

Wheelen and Hunger (2001) divided the internal environment into three important categories:  

1) structures – the way in which a company is organized in terms of communication, authority, and workflow;  

2) cultures – the pattern of beliefs, expectations, and values shared with the members of an organization in which 

organizational norms specifically conjure up and define the acceptable behaviors of the members of top managers 

to operational employees; and  

3) resources – the assets in the form of raw materials for production process of goods/services contained in the 

organization of the company.  



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In another side, David (2009) divided the internal forces into six important categories, consisting of the functions 

of management, marketing, financial/accounting, production and operation, research and development, and 

management information system. If the various things in the internal environment are done well, it will be very 

potential that the success of a strategy can be achieved as desired by the company (Pearce and Robinson, 2014). 

According to Adagba & Shakpande (2017) a firm's internal analysis involve examination and appraisal of such 

factors as its management, marketing and finance, operational/production and human resource. Ghani, Nayan, 

Izaddin, Ghazali, and Shafie, (2010) identify strength variables or factors of the business entity to include: 

Experienced and skillful work force: This enhances rational decisions and fulfillment of project requirement 

(Abdul and Abdul, 1999). Feasible Objectives: The business should have achievable strong short and long term 

objectives, and strategic managers could analyze the performance of any projects undertaken and at the same time 

plan for potential future development projects 

Strong Financial Sources: These facilitate further expansion of the business, allow the business to invest in more 

modern and sophisticated product concepts to satisfy customers' needs, satisfy the firm's constituents and abide 

by the government policy 

Effective and Efficient Management and Administration System: This ensures smooth operation. 

Good Image and Reputation: This attracts potential investors and confers competitive and market position 

advantages on the firm 

Currency of Techniques, Technology and Processes: The use of current technique, technology and processes 

confers competitive advantage of unequal measure on the firm in its procurement projects, design, concept and 

quality of inputs and products. 

Timely Information: This enables a firm to explore a competitive opportunity relative to its competitors in the 

industry. A good example is Zenith Bank's Initial Public Offer in 2004 shortly before the Central Bank of Nigeria's 

N25 billion bank recapitalization policy.  

Weakness variables or factors of the firm include: 

Under Capacity Utilization: This results to suboptimal allocation of firm's scarce resources, competitive 

disadvantage and unattained organizational objectives. Inadequate Experience and Technical Skills: This leads to 

low quality of strategy, concept, design, processes and products. 

Inadequate Financial Resource and inefficiency in financial management: This results to loss of opportunities and 

increases susceptibility to threats 

Inadequate know-how on evolution and application of current technology: This leads to inappropriate strategies, 

designs and processes and culminates to inability to explore opportunities 

Inability to attract Skilled and Professional Indigenous Workers: This leaves the firm with the alternative of 

parading low profile work force with its attendance competitive disadvantage. 

According to Hubeis and Najib (2014), the internal environment refers to the environmental organizations that 

exist in a normal firm and have immediate consequences. It's a collection of resources, talents, and skills that will 

be used to develop a market position based on the company's own assumptions. As a result, the internal 

environment analysis includes a study of the company's resources, expertise, and competency (Rita &Miswar, 

2018). A small business's success or failure is not solely determined by the external business environment. It also 

depends on the internal critical and strategic components of the organization, such as financial, marketing, and 

management capabilities (Aishatu, Tende, & Toriola, 2022). 



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Financial Capability  

Financial capability is the set of attitudes, knowledge, skills, and self-efficacy required to make and implement 

money management decisions that are best suited to one's individual circumstances, all while operating in an 

enabling environment that includes, but is not limited to, appropriate financial services (Morgan, Hui, & 

Kimberly, 2017). Financial capability implies that financial education and inclusion are merely means to an end. 

The goal is to improve one's financial situation. Providing consumers with new information about money 

management and financial services isn't enough. People should get financial education in a way that encourages 

them to improve their habits. Access to formal and semi-formal financial systems is also insufficient, if not 

downright dangerous. What is required is the building of an enabling environment that assists poor and excluded 

people in making sound financial decisions and taking the appropriate actions (Martina, Hana, & Jiří., 2015). 

Financial competency is defined as "a loosely connected set of strategic financial objectives, criteria, and 

standards that drive such planning," according to Svatoova (2017). According to Aishatu et al, 2012), financial 

strategy consists of two parts: efficiently producing funds needed by the corporation and regulating how those 

funds are used within the organization, including the decision to distribute or reinvest any additional returns. In 

order to achieve successful financial management in all areas, the major purpose of implementing a financial 

strategy in a company is to find a balance between controlling mechanisms, high business performance, and lower 

financial alternative costs (Jesús, Martha, & Miguel, 2015). They went on to say that financial strategy is a type 

of functional strategy that incorporates a company's whole business plan, is created through time, and is strongly 

linked to investment activities. Financial capacity, according to Murtala and Mohammed Noor (2016) and 

Svatoova (2017), is concerned with financial management, raising capital for the firm, and reinvesting profits. 

Marketing Skills  

The ability of a firm to promote her products and services is one of the most important factors of the survival and 

success of the organisation. According to Van Scheers (2011) a lack of marketing abilities hurts small business 

success. Pandya (2012) contrasts the marketing constraints of a small business to other constrained resources 

including financial and human resources. Marketing expertise Marketing capabilities are defined in general 

marketing literature as a company's capacity to use available resources to execute marketing operations in ways 

that result in desired marketing outcomes (Morgan, Constantine, & Douglas, 2012). In developing a durable 

competitive advantage and improved firm performance, marketing competencies are unique and non-replaceable 

(Morgan, et al., 2017). Marketing skills have also been shown to boost international business success by 

increasing the quantity and longevity of recognized positioning advantages (Tan & Sousa 2015). 

Managerial Capacities  

Several studies have identified the senior management team's managerial abilities as critical to small business 

success. Management capacities, according to Olawale and Garwe (2010), are sets of knowledge, skills, and 

competences that can help small businesses become more efficient. Management abilities, according to Singh, 

Garg, and Deshmukh, are essential for SMEs to survive and prosper (2008). According to Aylin, Garango, Cocca, 

and Bitichi (2013), management skills are a critical component of SMEs' growth, and a lack of management skills 

is a barrier to growth and one of the causes of failure. According to Pasanen, the growth patterns of small 

businesses are linked to their managerial abilities (2007). One of the most important difficulties that SMEs face, 

according to Bhide (1996), is a lack of core competence and a well-trained senior management team. 



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Managerial skills, according to Horng et al. (2011), are a specialized subset of competencies that demonstrate the 

intent to achieve specified goals. According to Hogg (2009), management competences aid in the display of 

abilities and talents, resulting in efficient performance in a certain occupational domain. Managerial competency 

models are built around the managerial competencies required for average and exceptional results. Observed 

behavior is used to evaluate these performance-based talents (Chong 2011). 

According to Krajcovicova et al., managerial abilities are becoming more relevant in a variety of businesses 

(2016). Businesses want to keep pushing their employees to reach new heights of performance. The distinction 

between mediocre and great managers can be made using competencies. Having excellent or above-average 

individuals is perhaps a firm's greatest strength, which can be achieved by weeding out typical personnel and 

providing them with ongoing education and personality development. Putting a competency approach into 

practice, despite the plethora of theoretical knowledge and concepts, is a difficult task. At first appearance, it 

appears to be a shift in strategy aimed at boosting overall performance. As a result of these realities, each 

employee's behavior is required to alter (Krajcovicova, et al., 2016). 

1.1.2 Business Growth 

Growth is increase in size or quality improvement, resulting from development in which the interacting internal 

changes series will increase size (Funk, 2022). It will be accompanied by changes in the characteristics of the 

growing object. The assets, net profits, and sales will increase. Cost reduction is crucial if the firm's industry 

proliferates and the competitors are involved in the wards of prices with attempts of increasing market shares. 

Firms not gaining the needed economy of the large productions will face significant losses unless they find and 

fill small and profitable niches if special features of products or services offset the high prices. 

The Business Growth Indicators  

Indicators of growth in your business are simply the metrics used to determine how well your business is 

performing. Understanding the relevant growth indicators of your business helps you as the owner and manager 

to fully recognize the dynamics of your business. It also helps you determine if the performance of your business 

meets your expectations. 

The indicators fall under four major groups, capacity, business outcomes, qualitative indicators, and business 

outputs (Funk, 2022).  

The outcome indicators include the profit, which is the difference between the costs and revenues. The profit any 

company makes is the function of the revenues it generates and its efficiency level. If the profits increase, it will 

show that the efficiency and the sales have increased. Therefore, it is possible to see the company's growth through 

an increase in efficiency and sales. 

Output indicators are the sales of the products. The level of production is a reasonable business size indicator as 

it the business capacity and the potential the business have for making a profit. The value of the produced goods 

is not available to people outside. Thus, the value of sales is used to indicate growth. When the produced business 

products increase, it shows that a business is growing. 

The capacity indicators reflect the business's potential of producing outcomes and outputs. They will include the 

invested capital, workforce size, assets value, and production capacity. Managers will realize the growth of their 

business through observing an increase in the production capacity and assets, not forgetting the invested capital 

and increase in employees' number. 



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The qualitative indicators include the management practices, formalization degree, and the structure of the 

business. When the business structure is expanded, allowing decentralization, and when the practices of 

management increase and are more complicated, the formalization degree will increase, meaning there is growth 

in the business. 

Safiruyu (2012) noted that there are qualitative and quantitative growth indicators of businesses. Both are 

necessary and should be considered to ensure the sustainable growth of your business. 

Qualitative growth indicators are indicators that cannot be quantified, i.e., these are the type of growth indicators 

that are not measured in numbers. Customer satisfaction, customer loyalty, good business reputation, good 

customers’ reviews, etc. are some of the key qualitative growth indicators of businesses. These metrics are very 

crucial as they help measure how well the business is doing and the business’ growth potential. Positive, honest 

reviews from your customers help recognize how well your business is doing. The level of loyalty maintained by 

your customers towards your business as well as the satisfaction your customers derive from your 

products/services are important metrics for your business’ growth. 

Quantitative growth indicators are measured in numbers. The quantitative business growth indicators are the 

most concentrated on due to their popularity. Sales growth, cost of production, gross profit growth rate, customer 

retention rate, inventory level, labour turnover rate, improving cash flow, operational performance and 

productivity, assets efficiency rate, etc.  These variables are some of the key quantitative business growth 

indicators. Rapid sales growth rate, falling or declining cost of production, increasing gross profit margin, high 

customer retention rate are indicators of a growing business. 

Other researchers have proposed the sales growth, employment growth, income growth, and market share growth 

as the most important measurement of small enterprises performance (Ontorael, & Suhadak, 2017). This is also 

based on an argument stating that growth is a more appropriate and accessible indicator than financial 

performance indicators. It is appropriate to view financial performance and growth as different aspects of 

performance, in which each has important and unique information. Together, financial growth and performance 

provide a wider description of the company’s actual performance rather than using individual measurements. 

The sales growth (and/or market share) is one of those conventional indicators that most directly indicates the 

ability of a business entity to maintain/reduce/increase the level of their market competitiveness, and at the same 

time it is considered to be the result and the measure of entrepreneurial orientation (Dragnić, 2014) 

1.2 Theoretical Framework  

The resource-based view (RBV) hypothesis was used to evaluate the impact of internal business environmental 

components on the performance of small and medium firms in Adamawa State. According to the theory, the key 

to improving a company's performance is to look at its internal aspects (Barney, 2001). The existence of an 

organization's resources, which are appreciated, valuable, and difficult to copy and substitute by competitors, 

explains performance discrepancies (Barney, 2001). It's a good idea to establish a resource before going on to the 

small company resource requirements. A company's resources are its tangible and intangible assets (Galbreath, 

2005). Financial resources, physical resources (plant, equipment, machine, etc.), people resources, and 

technological resources are tangible assets, whereas knowledge, skills, reputation, and capabilities are intangible 

assets. Businesses typically strive to gain and maintain permanent or semi-permanent control of resources that 

will offer them a competitive advantage over their rivals. Because they may have differing degrees of control 

over various sorts of resources, businesses will be diverse in terms of the products or services they supply. 



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Human resources, management policies, and skills are among the organizational assets that organizations utilize 

to develop and implement strategies or new innovations. The firm will profit from highly trained human resources 

and good alignment between the capabilities represented in the firm and those required by the firm's strategic 

needs (Crook, Todd, Combs, Woehr, &Ketchen, 2011). As a result, a company's internal growth and success are 

the most important sources of growth and success. To put it another way, companies with greater resources and 

capabilities will establish the foundation for acquiring and maintaining a competitive edge. The RBV hypothesis 

is especially important in the context of small businesses because it implies that a company's long-term existence 

is dependent on its distinctive services. The organization's main talents are fostered over time to create this 

identity. Small businesses are sometimes impeded by a scarcity of resources, causing them to operate under 

significant financial and personnel constraints (Phillipson, Bennett, Lowe, & Raley 2004; Zucchella &Siano, 

2014). Furthermore, a shortage of resources can cause small businesses to focus on short-term rather than long-

term goals, limiting their ability to develop and capitalize on environmental opportunities. As a result, the RBV 

technique is helpful since it allows the success of a small business to be quantified in terms of internal resources 

and skills. 

1.3 Empirical Review 

Aishatu, Tende, & Toriola, (2022) examined effect of Internal Business Environment on the Performance of Small 

and Medium Enterprises (SME’s) In Adamawa State. The study looked at the impact of the internal business 

environment (as evaluated by financial competence, marketing competency, and management competency) on 

the success of SMEs in Adamawa State, Nigeria. The total population of the study was 1,776 people (Adamawa 

State Chamber of Commerce and Industry, Adamawa State, 2019), with a sample size of 239 people chosen using 

Yamane's (1967) method and convenience sampling strategy. Data collected using questionnaire was analyzed 

via descriptive statistics, as well as correlation analysis and multiple regression technique. According to the study, 

financial aptitude, marketing ability, and managerial ability all have a positive and significant impact on the 

development of SMEs in Adamawa State. As a result, the study advises SMEs (entrepreneurs) and corporate 

leaders to re-vitalize their companies' financial capacity through smart financial planning. 

Engidaw (2021) explored internal business factors and their impact on firm performance: small business 

perspective in Ethiopia. The study employed a descriptive and explanatory research design and used a quantitative 

research approach. The study is conducted on Amhara region, North Wollo zone, Lalibela city administration 

micro- and small-scale enterprise operators, and in this study, the dependent variable is the performance of SMEs 

while independent variables are managerial factors, workplace factors, and entrepreneurial factors. To achieve 

the objectives of the study, 199 sample micro and small enterprises are selected from the 395 target populations. 

It used an explanatory design with stratified and simple random sampling techniques. The study employed 

descriptive and inferential statistical data analysis methods. The finding shows that the independent variables 

managerial factors and workplace-related factors have a positive and significant effect on small business 

performance in the study area. Also, there is an insignificant relationship between entrepreneurial factors and the 

dependent variable. 

Wahab, Ismail, & Muhayiddin (2019) examined the Effect of Internal Environmental Factors on Operational 

Excellence of Manufacturing Industry: A Pilot Study. The objective of this paper is to measure the reliability and 

validity of internal environmental factors and its construct. A pilot study was conducted among 30 SMEs company 

in Terengganu which represented by the managerial level who are closely linked to the manufacturing operations. 



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This study adopted a survey method by using simple random sampling method for the data collection. The 

reliability and validity of the instrument were examined through content validity, face validity and reliability 

based on expert assessment and the data was analyzed using the statistical software SPSS version 22. The result 

shows that the survey instrument is reliable and valid. Therefore, this study expected will help the Malaysian 

SMEs manufacturing sector in determining the effect of internal environmental factors on operational excellence. 

Ontorael, & Suhadak (2017) analyzed of the Influence of External and Internal Environmental Factors on 

Business Performance: A Study on Micro Small and Medium Enterprises (MSMES) of Food and Beverage. This 

study aimed to analyze and explain the influence of external environmental factors on internal environmental 

factors, along with the influence of external and internal environmental factors on business performance. This 

research was an explanatory research, using the questionnaire as the primary data and appointing the 

owners/managers of the enterprises as the object of the research. The total sample of this research was 108 

respondents of MSMEs in the sector of food and beverage that were registered in the Office of Cooperatives, 

SMEs, Industries, and Trades of Batu City. The data analysis of this research indicated that external environmental 

factors had a positive and significant influence on internal environmental factors. Similarly, external and internal 

environmental factors also had a positive and significant influence on business performance. 

Methodology 

3.1 Research Design 

The research design for this study is a survey research design. This design requires the use of questionnaire as 

instrument of data collection. Collecting information through a tactfully designed survey research can be much 

more effective and productive with large population and sample.  

3.2 Study Area 

The South East (often written as South-East) is the one of the six geopolitical zones of Nigeria representing both 

a geographic and political region of the country's inland southeast. It comprises 

five states – Abia, Anambra, Ebonyi, Enugu, and Imo. 

The zone is bounded by the River Niger on the west, the riverine Niger Delta on the south, the flat North Central to 

the north, and the Cross River on the east. It is divided between the Cross–Niger transition forests ecoregions in 

the south and the Guinean forest–savanna mosaic in the drier north. Culturally, the vast majority of the zone falls 

within Igboland–the indigenous cultural homeland of the Igbo people, a group which makes up the largest ethnic 

percentage of the south-eastern population. 

3.3 Sources of Data 

Two sources of data are identified for this study. The primary source was the questionnaire, while the secondary 

sources include documents, archives, statistics, research paper depositories, personal diaries/journals, etc. 

3.3.1 Primary Sources 

The primary source of data was 270 management and top senior staff of the 10 pharmaceutical companies who 

responded to the questionnaire. They were expected to generate sufficient data for finding answers to the research 

questions and testing the hypotheses. 

3.3.2 Secondary Sources 

This source provides information for the literature reviews completed in this work. The journal articles, theses, 

and other cognate publications by scholars on this research subject formed the secondary sources of data for this 

study.  

https://en.wikipedia.org/wiki/Geopolitical_zones_of_Nigeria
https://en.wikipedia.org/wiki/States_of_Nigeria
https://en.wikipedia.org/wiki/Abia_State
https://en.wikipedia.org/wiki/Anambra_State
https://en.wikipedia.org/wiki/Ebonyi_State
https://en.wikipedia.org/wiki/Enugu_State
https://en.wikipedia.org/wiki/Imo_State
https://en.wikipedia.org/wiki/River_Niger
https://en.wikipedia.org/wiki/Niger_Delta
https://en.wikipedia.org/wiki/North_Central_Nigeria
https://en.wikipedia.org/wiki/Cross_River_(Nigeria)
https://en.wikipedia.org/wiki/Cross%E2%80%93Niger_transition_forests
https://en.wikipedia.org/wiki/Guinean_forest%E2%80%93savanna_mosaic
https://en.wikipedia.org/wiki/Igboland
https://en.wikipedia.org/wiki/Igbo_people


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3.4 Population of the Study 

The study population was all management and senior staff of pharmaceutical companies in the South-East Nigeria. 

Since it was difficult to study all the states, two states with the highest number of pharmaceutical companies were 

studied namely Anambra (16) companies and Enugu (15) companies. Also, since all the 31 companies were 

difficult study, 5 companies were selected from each state. The total number of management and senior staff in 

the ten companies was 270 

Their details was shown in table 3.1 

3.5 Sample Size Determination 

Since the population is small, we adopted a complete enumeration of the population by surveying the entire 

population 

3.6 Instrument of the Study 

The instrument of study is a simple structured questionnaire, which was organized in a manner that addresses the 

key issues in the study objectives and research questions. The document is comprehensive and is made easy to 

understand by the respondents. The method of questioning used is the semantic differential type such as: Strongly 

Agree, Agree, Undecided, Disagree and Strongly Disagree.  

3.7 Validity of the Research Instrument. 

The instrument is validated at two stages; first, the document is subjected to a small group of respondents called 

(pilot group) for completion, and propositions that were not clear to the respondents were dropped from the final 

document. Second, the instrument is submitted to the research expert for vetting. This stage also caused more 

questions to be dropped from the draft. The final document was considered good for the respondents and good to 

capture the purpose and objectives of the study. 

3.8 Reliability of the Instrument 

The study adopted the Cronbach Alpha approach to test the reliability of the study instrument. This approach 

yielded an index of 0.82 which implies that the instrument was reliable to the tune of 82%. This showed that the 

questionnaire is reliable. 

3.9 Method of Data Analysis 

Pearson Product Moment Correlation Coefficient (rs) was used to analyze the hypotheses with the aid of statistical 

package for social sciences (SPSS 20.0)  

Data Presentation and Analysis 

4.1 Questionnaire Response Rate 

Questionnaire was distributed to 270 respondents, out of which 240 returned, representing a response rate of 83%. 

The response rate table is given below.  

Table 4.1: Questionnaire Response Rate 

Respondents Distributed 

270 

Returned 

240 

% Returned 

88 

Not Returned 

30 

% Not 

Returned 

12 

Source: Field Survey, 2023 

 

 



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4.2 Data Analyses 

4.2.1: The effect of financial capability on profit growth of pharmaceutical companies in South East Nigeria 

Table 4.2 Effect of financial capability on profit growth 

Options 

Strongly Agree 

Agree 

Undecided 

Disagree 

Strongly Disagree 

Total 

Responses 

90 

110 

10 

20 

10 

240 

% 

38 

46 

4 

8 

4 

100 

Source: Field Survey 2023 

Table 4.2 showed that 90 respondents (38%) strongly agreed that financial capability has effect on profit growth 

of pharmaceutical companies in South East Nigeria, 110 (46%) agreed; 10 (4%) were undecided; 20 (8%) 

disagreed; while 10 (4%) strongly disagreed. Since more than 50 percent agreed, it showed that financial 

capability has effect on profit growth of pharmaceutical companies in South East Nigeria. 

4.2.2: The effect of marketing capability on sales growth of pharmaceutical companies in South East Nigeria 

Table 4.3 effect of marketing capability on sales growth 

Options 

Strongly Agree 

Agree 

Undecided 

Disagree 

Strongly Disagree 

Total 

Responses 

100 

90 

20 

20 

10 

240 

% 

42 

38 

8 

8 

4 

100 

Source: Field Survey 2023 

Table 4.3 showed that 100 respondents (42%) strongly agreed that marketing capability has effect on sales growth 

of pharmaceutical companies in South East Nigeria, 90 (38%) agreed; 20 (8%) were undecided; 20 (8%) 

disagreed; while 10 (4%) strongly disagreed. Since more than 50 percent agreed, it showed that that marketing 

capability has effect on sales growth of pharmaceutical companies in South East Nigeria 

4.2.3: The effect of managerial capability on employment growth of pharmaceutical companies in South East 

Nigeria 

Table 4.4 effect of managerial capability on employment growth 

Options 

Strongly Agree 

Agree 

Undecided 

Disagree 

Strongly Disagree 

Total 

Responses 

80 

90 

20 

20 

30 

240 

% 

32 

38 

8 

8 

12 

100 

Source: Field Survey 2023 

Table 4.4 showed that 80 respondents (32%) strongly agreed that managerial capability has effect on employment 

growth of pharmaceutical companies in South East Nigeria, 90 (38%) agreed; 20 (8%) were undecided; 20 (8%) 



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disagreed; while 30 (12%) strongly disagreed. Since more than 50 percent agreed, it showed that managerial 

capability has effect on employment growth of pharmaceutical companies in South East Nigeria 

4.3 Hypotheses Testing 

4.3.1 Ho1: There is no significant effect of financial capability on profit growth of pharmaceutical companies in 

South East Nigeria 

Table 4.5 Correlation between financial capability and profit growth 

  financial 

capability 

profit growth 

    

financial capability Pearson Cor 1 .770** 

 Sig (2-tailed 214 .000 

 N 240         240 

    

    

    

profit growth Pearson Cor .770** 1 

 Sig (2-tailed .000  

 N 240 240 

    

    

** Correlation is significant at the 0.05 level (2-tailed).  

 

   

 

Decision Rule: Reject the null hypothesis if correlation coefficient is significantly different from zero, but accept 

the null hypothesis if correlation coefficient is not significantly different from zero (it is close to zero). 

Table 4.5 above shows the result of bivariate analysis between financial capability and profit growth. From the 

table, financial capability has a positive significant correlation with profit growth with a high correlation 

coefficient of .770 and a p-value of .000. Thus, the null hypothesis is hereby rejected and alternate hypothesis 

accepted. 

4.3.2 Ho2: There is no significant effect of marketing capability on sales growth of pharmaceutical companies in 

South East Nigeria 

Table 4.6: Correlation between marketing capability and sales growth 
  marketing 

capability 

sales growth 

    

marketing capability Pearson Cor 1 .828** 

 Sig (2-tailed 214 .000 

 N 240         240 

    

    

    

sales growth Pearson Cor .828** 1 

 Sig (2-tailed .000  

 N 240 240 

    

    

** Correlation is significant at the 0.05 level (2-tailed).     



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Decision Rule: Reject the null hypothesis if correlation coefficient is significantly different from zero, but accept 

the null hypothesis if correlation coefficient is not significantly different from zero (it is close to zero). 

Table 4.6 above shows the result of bivariate analysis between training and sales growth. From the table, 

marketing capability has a positive significant correlation with sales growth with a high correlation coefficient of 

.828 and a p-value of .000. Thus, the null hypothesis is hereby rejected, and alternate hypothesis accepted. 

4.3.3 Ho3: There is no significant the effect of managerial capability on employment growth of pharmaceutical 

companies in South East Nigeria 

Table 4.7: Correlation between effect of managerial capability and employment growth 

  managerial 

capability 

employment 

growth 

    

managerial capability Pearson Cor 1 .768** 

 Sig (2-tailed 214 .000 

 N 240         240 

    

    

    

employment growth Pearson Cor .768** 1 

 Sig (2-tailed .000  

 N 240 240 

    

    

** Correlation is significant at the 0.05 level (2-tailed).  

 

   

 

Decision Rule: Reject the null hypothesis if correlation coefficient is significantly different from zero, but accept 

the null hypothesis if correlation coefficient is not significantly different from zero (it is close to zero). 

Table 4.7 above shows the result of bivariate analysis between managerial capability and employment growth. 

From the table, managerial capability has a positive significant relationship with employment growth with a high 

correlation coefficient of .768 and a p-value of .000. Thus, the null hypothesis is hereby rejected, and alternate 

hypothesis accepted. 

5.1 Summary of Findings 

From the analyses, the following findings were made: 

i. Financial capability has a positive significant correlation with profit growth of pharmaceutical companies in 

South East Nigeria (correlation coefficient of .770) 

ii. Marketing capability has a positive significant correlation with sales growth of pharmaceutical companies in 

South East Nigeria (correlation coefficient of .828) 



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iii. Managerial capability has a positive significant relationship with employment growth of pharmaceutical 

companies in South East Nigeria (correlation coefficient of .768) 

5.2 Conclusion 

The study examined the effect of internal environmental factors on growth of pharmaceutical companies in South 

East Nigeria. The study found a positive effect of internal environmental factors like financial capability, 

marketing capability and Marketing capability on indicators of business growth such as profit growth, sales 

growth and employment growth. The study therefore concluded that internal environmental factors have effect 

on growth of pharmaceutical companies in South East Nigeria. 

5.3 Recommendations 

From the findings and conclusion, the following recommendations were made:   

1. In order to re-establish their enterprises' financial competence; pharmaceutical companies in South East Nigeria 

should source for finance in order to implement strong financial strategies.  

2. Pharmaceutical companies in South East Nigeria should always adopt a strong marketing plan since it will 

enable them to meet the needs and wants of the targeted consumers.  

3. Pharmaceutical companies in South East Nigeria should always ensure that the right people are employed to 

run the companies 

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