Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between related party transactions and organizational performance has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Selected Federal Government Parastatals in Nigeria where operating conditions differ markedly from more developed markets.

Selected Federal Government Parastatals in Nigeria presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While related party transactions is widely discussed in policy and industry circles, empirical evidence on its actual effect on organizational performance within Selected Federal Government Parastatals in Nigeria remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to related party transactions are helping or hindering organizational performance — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Related Party Transactions on organizational performance in Selected Federal Government Parastatals in Nigeria.
2. To assess the extent to which related party transactions influences organizational performance within the study area.
3. To identify the challenges associated with related party transactions in relation to organizational performance.
4. To recommend strategies for optimizing related party transactions in order to improve organizational performance.

1.4 Research Questions

1. What is the effect of related party transactions on organizational performance in Selected Federal Government Parastatals in Nigeria?
2. To what extent does related party transactions influence organizational performance within the study area?
3. What challenges are associated with related party transactions in relation to organizational performance?
4. What strategies can be adopted to optimize related party transactions in order to improve organizational performance?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around organizational performance. For managers and practitioners within Selected Federal Government Parastatals in Nigeria, the study provides practical insight into how related party transactions can be better managed. Finally, it contributes to the academic literature on accounting by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

The study is limited to an examination of Related Party Transactions and its relationship with organizational performance within the context of Selected Federal Government Parastatals in Nigeria. It reflects a MSc-level scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.