The Effects Of Strategic Management On Workers Performance In An Organization (A Case Study Of Zenith Bank Plc)
ABSTRACT
The study focused on strategic management as a tool for the attainment of organizational performance in selected Nigerian deposit money banks in Enugu Metropolis. The specific objectives sought to: ascertain the extent value chain affects growth in Nigerian deposit money banks profitability, determine the extent of effects of strategic change on market share in Nigerian deposit money banks productivity, examine the extent strategic leadership affects customer satisfaction in Nigerian deposit money banks effectiveness and determine the key challenges of adopting strategic management in Nigerian deposit money banks. The research design adopted in this study was survey which is characterized by direct interaction with the population. The target population of the study is 2093 comprising both the senior and junior staff of the three selected zenith banks branches in Enugu metropolis Nigeria. Taro Yamane’s formula was used to determine the sample size of 336. The key instrument of data collection was questionnaire and oral interview guide. The questionnaire was structured in 5-point Likert scale. The data were presented using sample table frequency and the formulated hypotheses were tested using simple linear regression and Friedman Chi-square. The study found that value chain to a great extent affected growth in Nigerian deposit money banks profitability (r = 0.882; F = 1.057E3; t =11. 249; p = 0.05). .Further the study revealed that economic and poor structures were the key challenges of adopting strategic management in Nigerian deposit money banks (X2cal = 492.352 >X2critical = 11.14, p 0.000 < α = 0.05).The study concludes that, the performance of deposit money Banks depend on the types of strategic they adopted. The study recommends that the organizations should intensify every effort to assess and monitor both internal and external variables in order to checkmate the unprecedented failure that could be controlled by continuous improvement.
CHAPTER ONE
INTRODUCTION
- Background to the study
Strategic management is a disciplined approach that utilizes the principles and process of management to identify the corporate objective or mission of any business. It determines an appropriate target to satisfy the objective, recognize existing opportunities and constraints in the environment, and device a rational practical way by which an objective can be achieved. Strategic management is a technique used by organizations to create favorable future as well as help helping them to prosper. The key to strategic management is to understand that people communicating and working together will create this future (Harfield, 1998).
In other words, strategic management emanates from both the process and philosophy for determining and controlling the organizational relationship in its dynamic environment. As a process, it attempts to define approaches and techniques aimed at assisting the management in adapting to the dynamics of today, through the use of objectives and strategies. Strategic management endeavours to achieve effective and efficient programs to accomplish the organization’s mission. As a philosophy, it changes how the manager looks at competitors, customers, markets and even the organization itself. Its primary objective is to stimulate management’s awareness of the strategic implication of environmental events and internal decision. Contemporary organizations see strategic management to be concerned primarily with actions organizations take to achieve competitive advantage and create value for the organization and stakeholders (Porter, 1981).
Lawrence and William (1988) define strategic management as a stream of decisions and actions, which lead to the development of an effective strategy or strategies to help achieve corporate objectives. The strategic management process is the way in which strategists determine objectives and make strategic decisions. Strategic management’s main focus is the achievement of organizational goals taking into consideration the internal and external environmental factors.
Porter (1985) argues that the essence of formulating comprehensive strategy is relating a company to its environment. Strategic management permits the systematic management of change. It enables organization to purposefully mobilize resources towards a desired future.
Chandler (1962) posits that any effective successful strategy is dependent on structure, thus to achieve any effective economic performance the organization needs to alter its structure. Strategic management is congruent with the quality movement’s emphasis on continuous improvement. Indeed, the emphasis on anticipating the needs of stakeholders is a critical component of external analysis.
Shrivastava (1986) eulogizes better on the meaning of strategic field using five operational criteria, derived from Giddens (1979). These indicate its ideological nature: the factual under-determination of action norms; universalization of sectional interests; denial of conflict and contradiction; normative idealization of sectional goals; and the naturalization of the status quo. Shrivastava concluded that strategic management was undeniably ideological, and that strategic discourse helped legitimize existing power structures and resource inequalities. Drawing from the above Shrivastava (1986) sought emancipation in the ‘acquisition of communicative competence by all subjects that allows them to participate in discourse aimed at liberation from constraints on interaction’. He also called on researchers ‘to generate less ideologically value-laden and more universal knowledge about strategic management of organizations’.
Stoney (1998) discovers that in the strategic management model, responsibility for corporate level decision-making rests within a core of strategic functions discharged from the day-to-day responsibilities of operational activities, these being devolved to the lowest possible level of control. Undistracted by operational matters and line responsibility, the elite (key functionaries) often the ‘executive board’, is left free to concentrate on strategic thinking and decision-making. Each banking organization’s experience with strategic management is unique, reflecting the organization’s distinct culture, environment, resources, structure, management style, and other organizational features. However, experience abound that working with leaders and managers in various organizations indicates that similar questions and concerns develop as organizations implement strategic management. Meyer (1991) further opines that strategic management can be distinguished from other organizational sciences by its emphasis on identifying, explaining, and predicting the determinants of organizational performance. The field’s central research question is ‘‘why do some firms outperform others?’’ Unlike efforts to explain organizational outcomes conducted in other disciplines, strategic management research has long recognized that phenomena originating from several levels of analysis play a role in determining organizational effectiveness. To maximize the chances of good performance, a firm needs to occupy a prosperous strategic group within a lucrative industry, for example the commercial banks in Nigeria. In these loci this study stands to investigate the impacts of strategic management as a tool for the attainment of organizational performance in Nigerian commercial banks.
- Statement of the problem
The acute phase of the global financial crisis is past and economic recovery is underway, but recovery remains fragile and is unexpectedly worrisome, as the growth impact of financial and monetary measures wane. The debt levels remain high, there is little growth in mature economies and ventures into stronger financial relationship remain politically and socially problematic. Organizations are seeking growth but much of the fine-tuning has been completed, through the technology revolution and the recent focus on cost reduction proposed by CBN in their policies. Notwithstanding, executives and managers are under relentless pressure to perform, because the competition is intense. Organizations want to increase revenue, improve productivity, attain their goals, operate more efficiently and effectively, be good corporate citizens, have happy, motivated employees, retain satisfied both profitable customers and mostly, find that elusive sustainable competitive advantage.
A strategic management plan is imperative to an organization pursuing its objectives. The problem is that many organizations operate on a five-year strategic plan broken into annual budgets, quarterly forecasts, and monthly reports, and which is often disconnected from real events. To take advantage of new opportunities and mitigate risks within the competitive environment, banks executives must review the strategic management plan on a continuous basis and stand firm to face their challenges. Despite the entire unsafe environment sprouting here and there in Nigerian financial institution, the management has failed to employ more energy in environmental analysis to identify what is wrong, as well as decisions and actions to be taken to ameliorate the challenge. For strategic management to result in superior performance, all the steps in the process need to be effectively managed. A brilliant strategy may put a company on the competitive map and increase its performance. Unfortunately, most companies struggle with implementation and therefore fail in performance enhancement
Despite the fact that strategic planning has brought far reaching revolution which has tremendously transformed most business landscape, it is still plagued with some constraints in the Nigerian banking industries. Some of these constraints include wrong application of strategic planning by Nigerian Deposit money banks, unethical attitude and conduct of bank managers and board of directors, poor organizational structure and non conformity to the rules and standards by the workers towards actualization of the strategic goals. This precarious situation drives the urgency for the implementation of strategic management in our commercial banking industry to maximize performance. Strategic management is important for organizational performance.
- Objective of the study
The broad objective of this study is to investigate Strategic Management as a tool for the attainment of Organizational Performance in Zenith bank. The specific objectives sought to:
- Ascertain the extent to which value chain affects profitability of Zenith bank
- Determine the extent strategic change affect market share of Zenith Bank in Nigerian.
- Examine the extent strategic leadership affects customer satisfaction Zenith bank’ Nigerian.
- Determine the key challenges of adopting strategic management by Zenith bank’.
- Research questions
The following formulated questions will serve as guide to the researcher:
- To what extent does value chain affect profitability of zenith Bank in Nigerian?
- To what extent does strategic change affect productivity of Zenith Bank in Nigerian?
- To what extent does strategic leadership affect customer satisfaction in Zenith Bank Nigerian?
- What are the key challenges of adopting strategic management in Zenith Bank?
- Research hypothesis
The hypotheses formulated below will guide the study:
- Value chain to a great extent affects the profitability of Zenith bank in Nigerian
- Strategic change to a great extent positively affects productivity of zenith bank Nigeria.
- Significance of the study
This study will be of immense significance to the Nigerian public, management and employees of the banks,
Nigerian Public: Banking industry contributes a great deal in the development of the Nigerian society. This is true because it plays a very importance role in our society in terms of its numerous financial assistance renders to the society at large. The study will be of great important looking at the role of the banking industry in steering economic development and growth of nation.
Executives or Board and Employee
This study will help executives or board to understand the importance of strategic management on performance of commercial bank. This will help them in highlighting areas that need to be improved and make strategic decisions that will enhance performance. The study will also help management and employees of the commercial banks to know the best mechanism of implementing strategies and devices for fixing their feedback
Policy makers (government and regulators)
Policy makers (government and regulators); this study will help policy makers to identify whether there is any improvement in the performance of commercial bank and financial industries, this can directly be attributed to strategic management. Therefore the study will help policy makers to ensure high performance.
- Scope of the study
The study focuses on strategic management as a tool for the attainment of organizational performance in zenith. The bank branches selected in Enugu state are: Emen branch, ninth mile branch and all located in Enugu metropolis. These bank were chosen because they met with the 25billion capital based, there are quoted in Nigeria stock exchange market and have similar mode of operation. The study covers the period of 2007- 2012.
- Limitation of the study
Attitude of the Respondents
The unwillingness of some of the management to divulge strategic information in the name of confidentiality was limitation to the study and some of the respondents showed negative attitude towards the study because there was no financial benefit attached while some refused to supply the necessary information probably due to their ignorance of the main purpose of this study.
Non availability of research materials
Being a new area of research in Nigeria, the researcher had the scarcity of research materials which invariably slowed down the pace work. This limitation was minimized by subscribing for research materials through online journals.
- Definition of terms
The key terms for this study were based on the contextual definition:
Corporate Strategy: corporate strategy as a strategy based on the experiences, assumptions and beliefs of management overtime and which may eventually permeate the whole organization.
Strategic Leadership: Strategic leadership is about transforming an organization through its vision and values, culture and climate, and structure and systems as well as through its strategy.
Strategic Decision Making: According to strategic decision making is seen as a crucial part of the process by which organization adapt to their environments.
Strategic Change :A restructuring of an organization’s business or marketing plan that is typically performed in order to achieve an important objective
Strategic Management: strategic management as a stream of decisions and actions, which leads to the development of an effective strategy or strategies to help achieve corporate objectives. In another words, it is concerned primarily with the actions organizations take to achieve competitive advantage and create value for organization and stakeholders.
Customer Satisfaction: Customer Satisfaction is an emotional response to the experiences provided by and associated with particular products or services purchased, retail outlets, or even molar patterns of behavior such as shopping and buyer behavior, as well as the overall marketplace
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