Role Of Strategic Management In Corporate Performance
(A Case Study Of Some Selected Banks In Owerri Imo State)
Strategic management plays a critical role in enhancing corporate performance by fostering a systematic approach to achieving organizational goals. In the dynamic landscape of business, effective strategic management involves a comprehensive analysis of internal and external factors, such as market trends, competition, and organizational capabilities. This proactive assessment enables companies to formulate well-informed strategies that capitalize on strengths, mitigate weaknesses, and align with emerging opportunities. It serves as a compass, guiding decision-making processes and resource allocation towards objectives that resonate with the company’s mission. Additionally, strategic management promotes adaptability, allowing organizations to navigate uncertainties and unforeseen challenges. By fostering a strategic mindset throughout the organizational hierarchy, companies can foster a culture of innovation and continuous improvement, ensuring sustained corporate performance in a competitive business environment.
This research work was designed to ascertain the role of strategic management in corporate performance, a case study of intercontinental bank and spring bank in Owerri. This research sought to determine the adequate performance of strategy in banking industries. Two instruments questionnaire and oral interview were used to collect the data for actual decision making. This study gives an insight and proper understanding of management strategy, how it is been formulated by the top level, implemented in an organization for goals and objectives to be attained. Also analysis of the hypothesis are formulated and tested based on the responses gathered from the respondents. Finally, adequate findings, conclusion and recommendation are provided to helps organization in their endeavors.
Title Page
Approval Page
Dedication
Acknowledgement
Abstract
Table of Content
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the Study 1-2
1.2 Statement of the Problem 2-3
1.3 Objective of the Study 3-4
1.4 Research Question and Hypothesis 4
1.5 Research Hypothesis 5
1.6 Significance of the Study 5-6
1.7 Scope/Delimitation of the Study 6
1.8 Limitation of the Study 6-7
1.9 Definition of Terms 7-9
CHAPTER TWO
2.0 Literature Review 10
2.1 Definition of Strategy 10-12
2.2 The Nature/Methods of Strategy formulation in an
Organization 12-14
2.3 Levels of Strategy 15-17
2.4 Strategic Planning and Management Process 17-22
2.5 Strategic Management 22-26
2.6 The Role of Chief Executives in Corporate Policy
and Strategic Management 27-28
2.7 The Impact of Strategy in Management Performance 28-29
2.8 The Importance of Strategy in Management Performance 30
2.9 The Problems of Strategy in Management Performance 31
2.10 Corporate Performance 32-33
CHAPTER THREE
3.0 Research Design and Methodology 34
3.1 Introduction 34
3.2 Research Design/methods used 34
3.3 Source of Data 34-35
3.4 Methods of Data collection 35
3.5 Population of Study and Sample Size Determination 36
3.6 Sampling size Determination 36-38
3.7 Sampling Techniques/Procedure 38
3.8 Validity and Reliability of Measuring Instrument 38-39
3.9 Method of Data Analysis 39-40
CHAPTER FOUR
4.0 Data Presentation and Analysis 41
4.1 Data Analysis 41-54
4.2 Discussion of Findings 54
CHAPTER FIVE
5.0 Summary of Findings, Conclusion and
Recommandations 55
5.1 Summary 55-56
5.2 Conclusion 56-57
5.3 Recommandations 57-58
Bibliography 59
Appendix I 60
Appendix II Questionnaire 61-63
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
When enterprise are looking for new life lines for survival and growth, strategic management offers a lot of hope. It is a basic requirement for corporate survival. An increasing number of Chief Executives Officers are recognizing the central value of long term planning and strategic thinking in anticipating changes an developing strategies that would enable them to take advantage of new opportunities and cope with increasing threats existing in potential markets. In all these, market and marketing strategies are emerging as the defining forces shaping strategic corporate plans.
The major challenge confronting corporate bodies today is how to cope with the environment where they operate and also the competition they get from other’s in the same or similar business. The banking industry for instance, banks have been facing serious challenges recently because of the government policy or monetary authority concerning the N25 billion capital base that is required of them, failing to meet which would mean being forced out of business and allowing those that are capable to operate and function in the economy. To that, effect strategies were formulated for goals and objectives to be achieved at the long-run. For practical purposes, the success of any business organization rests on the chief executive and how he perceives his organizations cohesion and market leadership. All these things centre on the policies which he steers the board to formulate and the strategies which he develops. To achieve the predetermined goals of the organization. Hence, the subject of corporate policy and strategic management is always seen logically from the view point of the chief executive, generally managers or managing directors as the case may be whose roles includes serving as the organizational leader, personal leader and architect of the organizational purpose. it is on this background that it becomes important to study the role of strategic management in corporate performance using intercontinental bank plc and spring bank as organizational study.
1.2 STATEMENT OF THE PROBLEM
The problems facing many organizations including the banking sector today could be traced from the view point of management and staffing. This is considered as one of the major problems in the banking sector whereby management teams are most time not up to standard for safe and sound bank environment. Infact, the problem facing the sectors can not be over emphasized, but will be mentioned for proper understanding.
They include the following;
1. Lack of strategic planning
2. Lack of efficient personnel or staff
3. Problem of illiquidity in banks
4. Inadequate information system and communication skills
5. Lack of innovation about new trends/change so as to gain large market share and to maintain optimum profitability.
Since corruption has eaten deep in recruitment and placement as a result of employing those that are not competent or qualified, which definitely give rise to low performance and not meeting with the required target.
1.3 OBJECTIVE OF THE STUDY
This research is designed to achieve the following;
1. To ascertain the role of strategic management on the level of achieving it’s designated goals and objectives in the banking industry with a particular reference to intercontinental bank and spring bank plc.
2. To evaluate the relationship between strategy and corporate performance of the banks mentioned
3. To assess the role of environmental factors of the strategic planning of the banks
4. To show the role of chief executive
1.4 RESEARCH QUESTION AND HYPOTHESIS
In the course of writing this project, there are some questions designed for the purpose of this study.
1. Do Intercontinental Bank Plc and Spring Bank involve in strategic planning?
2. How frequent do the banks involve in long range forecasting and decision making
3. What type of environment do they operate in?
4. What can be done to achieve corporate objectives which is profit maximization?
1.5 RESEARCH HYPOTHESIS
In this research work, there are hypothesis needed for the purpose of this study.
H0: Strategic planning is not involved in the management of banking industry.
Hi: Strategic planning is involved in the management of banking industry.
H0: The banks does not involve in long range forecasting and decision making.
Hi: The banks involve in long range forecasting and decision making.
H0: The banks does not operate only n the banking sector
H0: The banks does not operate only n the banking sector
1.6 SIGNIFICANCE OF THE STUDY
The objective of this research, when achieved will yield the following benefits.
i. It will help the banks mentioned to come up to a greater height in the banking sector
ii. It will also help the banks to attain their goals and objective
iii. It will help organizations to know their strength and weaknesses in strategic planning.
iv. From the study, other organization will identify some threats in the environment where the operate.
v. It will help organization to embrace the importance of strategic planning and it’s problems in a corporate performance.
vi. It will help both the banks and other organizations in appraising their workers in terms of performance.
1.7 SCOPE/DELIMITATION OF THE STUDY
In this study, the researcher intends to investigate the contributions of strategic management in the growth of Intercontinental Bank and Spring Bank Plc. Also the researcher wants to know the level of adoption and rejection.
1.8 LIMITATION OF THE STUDY
The limitation includes the following;
i. Ignorance handicap: Where some banks officials or workers of intercontinental banks and spring banks plc regarded the researcher as a spy to monitor their operation.
ii. Attitude Constraint: In the case of questionnaires, some bluntly refused to collect it to fill while those that collected took a lot of time to fill in the required answers, some fill them haphazardly.
iii. Time Problem: This is the major constraints of the fact that the academic calendar of the institution is so short coupled with the deadline of submission and defense of the project work.
iv. Financial Problems: This is another problem facing the researcher as she found the cost of gathering and analyzing information both (primary and secondary data). Al the information needed to complete this project is quite expensive.
v. Transportation: Due to the inability in the side of transportation, from Akanu-Ibiam Federal Polytechnic Unwana, Afikpo Ebonyi State down to Owerri, Imo State was not quite easy to gather much information needed.
1.9 DEFINITION OF TERMS
i. Strategy: This is the determination of the organizational long-term goals and objectives, the adoption of courses of action and allocation of resources necessary for carrying out these goals. That is, where an organization want to go, and how it intend to get there.
ii. Strategic Management: Is the creation of vision that leads to the formulation implementation, evaluation and control of strategies to improve the organizational long-term or long-run programme over growth and stability.
iii. Management: This is the utilization of human and material resources towards the actualization of organizational goals and objectives.
iv. Roles: This is the function of something
v. Corporate: It is the total assessment of performance of an organization in terms of profitability and non profitability at the end of each financial year.
vi. Policy: This is the study of functions and responsibilities of chief executives, or senior management, on the crucial problems that effect success in the total enterprise and the decisions that determine the direction of the organization and shape it’s future i.e it provide direction in decision making.
vii. Objectives: This is the results which the organization wishes to accomplish. That is, objective are the end towards which organization are directed.
viii. Goals: Are objectives which are made specific with respect to degree and time.
ix. Business Environment: Are the sum of all the factors which are constantly changing but are either within or outside the control or manipulation of management of an enterprise.
Role Of Strategic Management In Corporate Performance
Strategic management plays a crucial role in corporate performance by helping organizations set and achieve their long-term objectives. It involves the formulation and execution of strategies that align an organization’s resources and capabilities with its external environment. Here are several ways in which strategic management influences corporate performance:
Direction and Focus: Strategic management provides a clear sense of direction for the organization. It helps in identifying the company’s mission, vision, and values, which guide decision-making and actions. This focus ensures that all efforts are aligned towards achieving common goals.
Goal Setting: Through strategic management, organizations set specific, measurable, achievable, relevant, and time-bound (SMART) goals. These goals provide a framework for performance evaluation and motivate employees to work towards common objectives.
Resource Allocation: Strategic management involves allocating resources effectively and efficiently to support strategic initiatives. This includes financial, human, and other resources. Proper allocation ensures that resources are not wasted and are used to maximize performance.
Competitive Advantage: Strategic management helps organizations analyze their competitive environment and develop strategies to gain a competitive advantage. By understanding the market, competitors, and customer needs, companies can position themselves effectively and outperform rivals.
Risk Management: Identifying potential risks and uncertainties is a critical part of strategic management. Companies can develop risk mitigation strategies and contingency plans to address potential threats, reducing the impact on performance.
Innovation and Adaptation: Strategic management encourages innovation and adaptability. Companies must continually assess their strategies and make adjustments as needed to stay relevant in a changing business environment. This flexibility is vital for long-term success.
Performance Measurement: Strategic management establishes key performance indicators (KPIs) and metrics to measure progress toward strategic goals. Regular performance assessments allow companies to identify areas of improvement and make necessary adjustments.
Efficiency and Effectiveness: Strategic management promotes efficiency by aligning all activities with the strategic plan. It helps organizations avoid duplication of efforts and resources, leading to improved overall effectiveness.
Long-Term Sustainability: Strategic management emphasizes long-term sustainability rather than short-term gains. By focusing on long-term goals and responsible decision-making, companies can build a solid foundation for continued success.
Communication and Alignment: Strategic management facilitates communication and alignment across all levels of the organization. When everyone understands the company’s strategic objectives and their role in achieving them, it fosters a cohesive and motivated workforce.
Stakeholder Satisfaction: By considering the interests of various stakeholders, including customers, employees, investors, and the community, strategic management can help improve stakeholder satisfaction. Satisfied stakeholders are more likely to support the organization’s growth and success.
Adaptive Learning: Effective strategic management promotes a culture of learning and adaptation. Organizations can learn from both successes and failures, using this knowledge to refine their strategies over time.
In summary, strategic management is a fundamental process that guides an organization’s actions, resources, and decisions to achieve its long-term objectives. When executed effectively, it can significantly enhance corporate performance by ensuring alignment, adaptability, and a competitive edge in a dynamic business environment.