Effect Of Strategic Management On Corporate Performance

Introduction

1.1 Background of the Study

Strategic management has been regarded as the most essential practise that separates organizations from one another in the globalisation dispensation. Strategic management is a vital technique for realising an organization’s purpose, policy and aims. Strategic management is the supervision of organizational resources with the goal of accomplishing a specific aim or target (Pearce & Robinson 2017). All organizations, irrespective of what they offer, should engage in strategic management practices to guarantee they fit into the context in which they operate. According to Huynh, Gong, and Tran (2022), in the modern business climate, corporate organizations face strong competition in both local and global marketplaces. Thus to stay afloat and be productive, they must apply strategic management methods to boost their competitive edge and obtain additional benefits (Huynh et al., 2022). Achieving a competitive advantage position and enhancing firms’ performance relative to their competitors are the main objectives that business organizations in particular should strive to attain (Raduan, Jegak, Haslinda an Alimin 2019). Strategic management may be influenced by an organization’s size and its ability to adapt to changes in its commercial surroundings. As a result of its scale, breadth of operation and necessity for incorporating stakeholders’ perspectives and expectations, a multinational organization may utilise an official strategic management approach.

The notion that strategy content effects organizational performance is a basic component of general management theory. Strategy content may be described roughly as how an organization strives to match itself with its surrounding circumstances (Donaldson 2015). Strategy can be characterized as senior managers’ response to the constraints and opportunities that they face. Major management theories, referenced in (Meier, O’Toole, Boyne, and Walker 2012), such as those of Chandler (1962) and Child (1972), emphasise that private companies can employ strategic choice even when confronted with external limitations. The method in which they approach strategic challenges can have an impact on the company’s overall performance and growth. The rising intricacy and fast shifts within the company’s operational context rendered the originally intended policy paradigm obsolete, because a corporation’s expectations could not presently be met only through establishing policies and functional-area collaboration (llesanmi, 2014). As a result, when the business setting becomes more volatile, managers see that strategic planning, with a special focus on environmental evaluation, within-company capacity analysis, and plan establishment is inadequate.

Modifications in customer preferences, short delays in raw material supply, or even global economic downturns may force a company to undertake organizational modifications in order to adapt to market demands. Staff reduction, simpler inventory management, cost management, and downsizing tactics are some of the most likely solutions that the corporation can pursue in such situations. However, they are acts that are only effective in the short run. In Nigeria, where the cause of financial disruption is structural inequality, the private sector business must turn to more basic solutions (llesanmi 2014). As a result, the biggest problem for private sector enterprises in Nigeria today is integrating a strategy framework into operational activity, a framework which recognizes the domestic resources base, which employs local technology and which guarantees the business community of both operation and management. The strategic framework must, of course, address basic problems such as resource strength, infrastructural constraints, suitable degree of technological advancement and raw material intake.

Strategic management is a discipline which is concerned with the intentional and organic measures undertaken by executives on behalf of owners, requiring resource utilisation, to improve company productivity in their external settings (Nag, Hambrick & Chen 2017).

1.2 Statement of the Problem

Organizational performance has recently been the target of intense study initiatives. Managers in the public and private sectors are becoming more mindful of local products and services, most effective public relations approach, cutting-edge technology, and having a suitable framework for employing and handling the organization’s human resources constitute essential for gaining competitive edge. Many organizations spend the majority of their effort recognising and responding to unanticipated developments and difficulties rather than predicting and planning for them. This is referred to as crisis management. Organizations that are unprepared might be forced to devote a lot of effort and time meeting up. They will utilise almost all to tackling present difficulties, leaving little time to foresee and plan for future challenges. Many organizations become reactionary as a result of the never-ending cycle. Consequently, the implementation of strategies intended and customised for the accomplishment of the company’s aim must be crafted in a manner in which it will not only assist in maintaining a regulated market share but also contribute to company productivity by way of improved earnings at the lowest possible cost.

Hajara (2017) noted that the major problem organizations are facing today is lack of clear definition of strategic management and their objectives. Figuring out the definition is the primary objective. The second problem will give us basic and important knowledge of strategic management. Therefore, in developing a strategy, assessment of the environment (both external and internal), strategy development and systemic or longterm planning are all taken into account (Wheelen and Hunger 2016). According to Finkelstein (2003), the key organizational difficulty in the globalisation period is the execution of strategies, strategic assessment, and strategic performance.

The problem at hand lies in the necessity to comprehensively assess the effectiveness of strategic management strategies within First Bank’s Gboko Branch and their subsequent impact on the branch’s overall performance metrics. While strategic management is widely recognized as a cornerstone of organizational success, its application and outcomes can vary significantly across different branches, especially within the complex landscape of the banking industry.

1.3 Objective of the Study

The primary objective of the study is to examine the effect of strategic management on corporate performance (a case study of First Bank, Gboko Branch).

The specific objectives is as follows:

Identify the managerial strategic techniques employed in First Bank, Gboko Branch.

Determine whether there is a significant relationship between strategic management and corporate performance.

Determine the impact of strategic management on corporate performance of First Bank, Gboko Branch.

Identify the factors which impede the effective implementation of strategic management initiatives in First Bank, Gboko Branch.

1.4 Research Question

The study will be guided by the following questions;

What are the managerial strategic techniques employed in First Bank, Gboko Branch?

Is there a significant relationship between strategic management and corporate performance?

What is the impact of strategic management on corporate performance of First Bank, Gboko Branch?

What are the factors which impede the effective implementation of strategic management initiatives in First Bank, Gboko Branch?

1.5 Research Hypothesis

Ho: There is no significant relationship between strategic management and corporate performance.

Ha: There is a significant relationship between strategic management and corporate performance.

1.6 Significance of the study

For First Bank’s Gboko Branch and similar entities, the study’s findings can serve as a roadmap for optimizing strategic management initiatives to drive improved corporate performance. By identifying and leveraging best practices, the branch can enhance its competitive position, profitability, and overall operational efficiency.

Policymakers and regulatory authorities in the banking sector can benefit from understanding the impact of strategic management on corporate performance. Insights from this study may inform the development of policies and guidelines aimed at promoting effective strategic management practices within banks, thereby contributing to the stability and sustainability of the financial sector.

This research will contribute to the academic literature by providing empirical evidence on the relationship between strategic management and corporate performance within the banking sector. It will add to the existing body of knowledge by offering insights into the applicability and effectiveness of strategic management theories and frameworks in real-world organizational settings.

1.7 Scope of the Study

This study focuses on the examination on the effect of strategic management on corporate performance. Geographically, the study will be carried out in First Bank, Gboko Branch).

1.8 Limitations of the Study

The researcher encountered minor obstacles when conducting the study, as with any human endeavor. The significant constraint was the scarcity of literature on the subject due to the nature of the discourse, so the researcher incurred more financial expenses and spent more time sourcing for relevant materials, literature, or information and in the data collection process, which is why the researcher resorted to a limited choice of sample size. Furthermore, the researcher did this investigation alongside other academic activities. Furthermore, the sample size was limited because only a few respondents were chosen to answer the research instrument, therefore the results cannot be generalized to other secondary schools outside the state. Despite the constraints encountered during the research, all elements were minimized in order to provide the best results and make the research effective.

1.9 Definition of Terms

Strategic Management:

For the purposes of this study, strategic management refers to the process of formulating, implementing, and evaluating long-term objectives and initiatives aimed at achieving organizational goals. It encompasses activities such as environmental analysis, strategy formulation, strategy implementation, and strategic control within the context of First Bank’s Gboko Branch.

Corporate Performance:

In this study, corporate performance is operationally defined as the measurable outcomes and results achieved by First Bank’s Gboko Branch in key areas such as financial performance, operational efficiency, customer satisfaction, market share, and overall organizational effectiveness. Performance indicators may include but are not limited to profitability ratios, return on investment, customer retention rates, and employee productivity metrics.

1.10 Organization of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter (chapter five) contains the summary, conclusion and recommendation.