Author: Ngene Ifeoma Juliana
Department: Business Administration
Affiliation: Nnamdi Azikiwe University Awka

This study investigates inflation rate on organizational performance of food and beverage industry with additional focus on the contribution of exchange rate instability and effect of import on the performance of this industry in Nigerian between 1990 and 2012. Secondary Data were obtained through relevant publications such as journals, various publications of food/beverage industry, Central Bank of Nigeria statistical bulletin and world development report. Models were estimated using ordinary least square (OLS) regression technique. From the study, it was observed that the causal link between macroeconomic environment and organization performance is dependent on environmental variables such as inflation rate, economic growth, export, import, industrial production and exchange rate. It simply means that an increase in inflation rate have an adverse effect on manufacturing sector and their profitability. This put together affect the performance of food and beverage industry in Nigeria. This study contributes to the idea that the causes of inflation rate in Nigeria are dynamic, requiring full knowledge at any point in time to be able to proffer solutions to the inflationary trends in the country which can lead to high cost of productivity and increased living standard of the citizenry. The study also concludes that all things being equal, controlling of the external business environment can be done to some extent. This entails and calls for constant monitoring and conducting environmental scanning always. In recommendation, understanding the trend in this environment will enable the organization to choose the appropriate strategy or strategies that fit the trend in the external business environment. Also, concerted effort should be made by policy makers to increase the level of output in Nigeria by improving productivity/supply in order to reduce the prices of goods and services (inflation rate) so as to boost the performance of industrial sector in economy.

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