The Impact Of Strategic Management On Organisational Performance
The strategic management function is perhaps the most fundamental and most important aspect of management and managing. The study investigated the impact of strategic management on organizational performance of selected manufacturing firms in Anambra State. 63 respondents selected from 21 manufacturing firms across the three senatorial zones of Anambra State were sampled (3 from each firm). The study used descriptive statistics (frequencies, mean, and percentages) to answer the four research questions posed for the study. The Chi-Square was used to test the three hypotheses that guided the study. Results from the analysis indicated that strategic management is not common among the manufacturing firms in Anambra State; that the adoption of strategic management has significant effect on competitiveness and also influences manufacturing firms; that strategic management has effect on employee’s performance and that its adoption has significantly increased organizational productivity of manufacturing firms; also, it enhances structural development of manufacturing firms. The study thus concluded that though strategic management is not yet a common business practice among manufacturing firms in Anambra State, it has been identified as veritable tool for improving the competitiveness, performance levels, and structural development of manufacturing firms in Anambra State in particular and Nigeria in general.
The researcher recommended that entrepreneurial centre and business schools in Nigeria should incorporate strategic management principles into their curricula. This will engender sound managerial know-how and boost the performance and competiveness of firms in Nigeria. Also, further studies should be carried out in Nigeria to investigate the causes on non-adoption of strategic management in Anambra State in particular and Nigeria in general. The causes of this when known and curbed, will enable small and medium scale industries in Nigerian to become more competitive in boosting the development of Nigerian economy.
Table Of Contents
- Title page
- Certification page
- Table of content
- 1.1 Background of the study
- 1.2 Statement of the problems
- 1.3 Objectives of the study
- 1.4 Research question
- 1.5 Hypotheses
- 1.6 Significance of the Study
- 1.7 Scope and limitations of the Study
- 1.8 Organization of the study
- 2.1 Conceptual review
- 2.2 Theoretical Framework – Resource-Based Theory
- 2.3 Empirical Framework
- 3.1 Research Design
- 3.2 Sample and Sampling Techniques
- 3.3 Instrumentation
- 3.4 Validity of the Instrument
- 3.5 Method of Data Analyses
- 3.6 Ethical consideration
Presentations And Interpretation Of Results
- 4.1 Introduction
- 4.2 Socio-Demographic Characteristics Of The Study
- 4.3 Analyses of research questions usage of strategic management by manufacturing firms
- 4.4 Hypotheses Testing
Summary Of Findings, Conclusion And Recommendations
- 5.1 Summary of Findings
- 5.2 Conclusion
- 5.3 Recommendations
1.1 Background of the study
The performance of organization is the focus of intensive research efforts; how well an organization performs its mission and accomplishes is its goals of programs delivery is to paramount concern.
The success of failure of a strategy is significantly determined by the quality of leadership displayed by the strategy leader normally the CEO, during the strategy implementation process.
In today’s increasingly chaotic world and an ever changing environment, it is not enough to just keep the organization afloat it is far more essential to make steady progress toward some well- defined objectives.
Modem knowledge based organization are ideal setting for the application of strategic management practices strategy, in effect it’s management’s game plans for strengthening the organization’s position, pleasing customers and achieving performance targets. Managers devise strategies to guide how the organizations business win be conducted and to help the make reasoned and make cohesive choices among alternative causes of action. The strategic managers decides and indicates the path and action they could choose, they decide to tallow particular rate d conduct their business in that particular manner without a strategy, a manage has no roadmap to follow, to manage and no unified action programme to produce the intended results.
The business of the twenty first century irrespective of its size is going to be part of the global business community affecting and being affected by social change, events and pressures from around the world. This is so because the business environment is changing, dynamic, turbulent, discontinuous and highly competitive. In this period, the relationship between business and society has changed radically. Key drivers of this change have been globalization of trade, increased size and influence of corporate organizations, the repositioning of government and the rise in the strategic importance of stakeholder’s relationships, knowledge, and brand reputation. (Olanipekun, 2014). The competitive business environment has resulted into complexity and sophistication of business decision-making which requires strategic management. Managing various and multi-faceted internal activities is only part of the modern executive’s responsibilities. The firm’s immediate external environment poses a second set of challenging factors. To deal effectively with all that affects the ability of a company to grow profitably, executives design strategic management processes they feel will facilitate the optimal positioning of the firm in its competitive environment. Strategic processes allow more accurate anticipation of environmental changes and improved preparedness for reacting to unexpected internal and competitive demands.
Porter (1985) argues that the essence of formulating comprehensive strategy is relating a company to its environment. Aremu (2010) opinedthat a clearly defined strategy that will lead to enthusiasm among various stakeholders which includes shareholders, suppliers, creditors, customers, and employees and as a result promote commitment that will enhance better performance of business organization. Strategic management permits the systematic management of change. It enables organization to purposefully mobilize resources towards a desired future. Sharabati& Fuqaha (2014) opined that in the globalization era, the strategic management has been considered as the most important practice which distinguishes organizations from each other’s. Strategic management is the key process to achieve organizational vision, strategy and objectives. All organizations whatever they are, whatever they do, they should perform a strategic management practices to insure that they fit within their environment.
Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments. (Nag, Hambrick, Chen 2007). It entails specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. Strategic management is a level of managerial activity under setting goals and over tactics. Strategic management provides overall direction to the enterprise. Strategic management includes not only the management team but can also include the Board of Directors and other stakeholders of the organization. It depends on the organizational structure.
Strategic management is the process of specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programmes, which are designed to achieve these objectives and then allocating resources to implement the policies and plans, projects and programmes. Veskaisri, Chan and Pollard (2007) posited that without a clearly defined strategy, a business will have no sustainable basis for creating and maintaining a competitive advantage in the industry where it operates.
1.2 Statement of the problems
Those engaged in strategic management practices need to be aware of certain often,organization’s external environment poses. externally imposed threats may stem from cheaper technologies, the advent of new substitute products, adverse economic trends restrictive government action, changing consumer va1ves and lifestyles, projection of natural resources depletion, unfavorable demographic shifts, n w sources of strong competition and the likes; such threat can be a major factor in shaping organizational strategy.
As it occurs with all management techniques, individual will need extensive training and refresher training to answer unforeseen questions that arise in response to implementation, conflict, confusion and chaos will prevail initially and for sometimes therefore, only individual learn how to do it and see its valve will the benefit of strategic management be realized.
In an empirical study noting e impact of strategic management on organizational performance, the m [or problems that are associated with bad performance and lack of strategic management can be highlighted below.
- Lack of internal career leader: A career system is necessary to focus individual attention on the strategic issues facing an organization over the long term. A long-term perspective induces organizational commitment and loyalty. It enables individuals and organizations to invest training and productivity improvements knowing that they will reap the benefits from that enhanced knowledge and technique.
- Lack of formal training system: the importance of training has been a Neglected area and too much of what goes on in today’s organization requires specific adaptation. Therefore managers’ functions is the development the people for future advancement.
- Lack of employee voice/participation: A theory of individual self- interest, which not only operates in terms of the economic market but with respect to socio-political values is primary an attempt to explain an organization survival.
- Lack of broadly defined jobs: problems arise when individuals are designed to jobs officially having lower grades, and a lower grade assignment might be seen psychological as a career setback.
- Lack of performance-based compensation: strategic pay requires that all decisions relation to compensation and benefit are designed to attracts, retain or motivate employees as such the entire organization rewards structure is designed to fully serve its mission or purpose.
In addition, strategic management remains undeniable considering the fact that resources are inadequate in scope, volume and composition to meet the varying wants of individuals. Organizations and society couple with the present rapid realization that the environment is increasingly becoming unpredictable where nothing has an air of certainty.
1.3 Objectives of the study
The main objective of the study is to examine the impact of strategic management on organizational performance.
The specific objectives are to:
- Determine the extent to which strategic management is practice by manufacturing firms in Anambra State of Nigeria.
- Determine the relationship between the level of competition and adoption of strategic management.
- Assessed the relationship adoption of strategic management and organizational performance.
1.4 Research question
- Is strategic management practiced by manufacturing firms in Anambra State of Nigeria?
- What is the effect of strategic management on level of competition?
- What is the effect of strategic management on organizational performance?
The following null hypotheses guided the study:
- Adoption of strategic management does not have effect on the level of competition of manufacturing firms.
- Adoption of strategic management does not have significant effect on organizational performance.
- Adoption of strategic management does not have significant effect on structural development of an organization.
1.6 Significance of the Study
One of the aims of the study is to bring to bear the relationship between strategic management and performance in the savings and loans sector. The findings will reveal the importance of strategic management as a key objective of the study. The study will further identify the success factors of strategic management which will guide players in the sector on what factors to pursue in implementing strategic management in their organizations.
The study will further identify the pitfalls in the implementation of strategic management so the organizations will avoid the consequences. Also, the study will contribute to literature on strategic management and serve as a reference material to guide other researchers who will undertake similar studies.
1.7 Scope and limitations of the Study
The study is carried out on the impact of strategic management on organizational performance. The study was limited to manufacturing companies in Awka, Onitsha and Nnewi zones scattered across the LGAs in Anambra State. Due to time and financial constraints, the study will be limited to strategic management implementation in the organization that is involved in this study and its relationship to its growth.
1.8 Organization of the study
The study comprises five chapters.
Chapter one discusses the background, problem statement, scope, significance, and objectives for undertaking this research project.
Chapter Two looks at existing literature related to the study to gain an understanding of the research topic.
Chapter Three presents the research methodology that the researcher will use to undertake the study.
Chapter Four comprises the findings and discussions of the findings to the study.
Chapter five summarizes the findings of the study and also makes recommendations that would contribute to solving the problem raised, as well as a recommendation for further study.
Summary Of Findings, Conclusion And Recommendations
5.1 Summary of Findings
Studies have shown that achieving a competitive advantage position and enhancing firm performance relative to their competitors are the main objectives that business organizations should strive to attain. Also, the idea that strategy content influences organizational performance is a central element of generic management theory. To remain competitively advantaged, studies have equally suggested the use of strategic management. This is because strategic management identifies the purpose of the organization and the plans and actions to achieve the purpose.
Despite these, no research work has targeted to investigate the impact of the broad subject of strategic management on organizational performance in Nigeria. Existing studies in Nigeria, aimed at human resource development (e.g. Oladipo and Abdulkadir, 2010; Oladipo and Abdulkadir, 2011, Abdulkadir, 2012). Related studies on this study were on strategic planning (an off shoot of strategic management) (see Ilesanmi, 2011 and Akinyele&Fasogbon, 2007). Of these studies in Nigerian, none accessed the impact strategic management of planning on manufacturing sub-sector of the economy. More so, scanty studies have been done on strategic management in Africa (e.gRaduan, Jegak, Haslinda and Alimin, 2009 in Malaysia, and Gichunge, 2010 from Kenya) did not cover indeed, the areas that the objectives of this work covers.
Based on the above premise, the study investigated the level of use and effect of strategic management on manufacturing firms in Anambra State. Following assertions that strategy can be characterized as senior managers’ response to the constraints and opportunities that they face, this study used sampled responds from only managers and senior staff cadre of manufacturing firms. Descriptive and Chi – Square test indicated the following findings:
- Strategic management is not common among the manufacturing firms in Anambra State.
- Strategic management influences competitiveness and that adoption of strategic management has significant effect on competitiveness of manufacturing firms.
- Strategic management has effect on firm performance and that adoption of strategic management has significant effect on organizational performance for manufacturing firms.
Strategic management is not yet a common business practice among manufacturing firms in Anambra State. Nonetheless, strategic management has been identified has veritable tool for improving the competitiveness, performance levels, and structural development of manufacturing firms in Anambra State in particular and Nigeria in Nigeria.
The study recommended that further studies be carried out in Nigeria to investigate the causes of non-adoption of strategic management in Anambra State in particular and Nigeria in general. The causes of this when known and curbed, small and median scale industries in Nigerian might become more competitive in boosting the development of Nigerian economy.
The entrepreneurial centre and business schools in Nigeria should incorporate strategic management principles into their curricula. This will engender sound managerial know-how and boost the performance and competitiveness of firms in Nigeria.
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