A Theoretical Framework for Diagnosing Structural Pathologies in Nigerian Business: An Institutional and Behavioural Perspective

The persistent underperformance of many domestic enterprises, despite resource abundance and market potential, suggests deep-seated structural issues. Prevailing analyses often focus on macroeconomic or governance factors, neglecting the complex interplay between formal institutions and the behavioural patterns of key actors within the business ecosystem. This article develops a novel diagnostic framework to systematically identify and analyse the structural pathologies afflicting business organisations. It aims to integrate institutional theory with behavioural finance principles to explain how dysfunctional norms and cognitive biases become entrenched. The study constructs a theoretical framework through a synthesis of institutional economics and behavioural science literature. It employs a systems-thinking approach to model the recursive relationships between weak formal institutions, informal coping strategies, and the reinforcement of detrimental managerial heuristics. The framework identifies a self-reinforcing 'pathology loop' where institutional voids foster reliance on informal networks, which in turn promotes short-termist decision-making and overconfidence. A central theme is the normalisation of non-productive entrepreneurial activities aimed at navigating, rather than reforming, systemic constraints. Structural pathologies in business are not merely external constraints but are internalised and perpetuated through routine organisational practices and shared cognitive frames. Effective intervention requires simultaneous attention to institutional design and the behavioural routines they incentivise. Policymakers and business development programmes should adopt dual-track interventions targeting both institutional hardening and behavioural 'nudges' within firms. Diagnostic tools based on this framework should be used to tailor specific remediation strategies rather than applying generic best practices. structural pathology, institutional voids, behavioural finance, diagnostic framework, business ecosystems, Nigeria This paper provides the first integrated theoretical model that explicitly links macro-level institutional failures to micro-level behavioural biases in a business context, offering a new diagnostic tool for researchers and practitioners.