Relevance Of Strategic Management In A Competitive Banking Environment

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Relevance Of Strategic Management In A Competitive Banking Environment


Abstract


Relevance of strategic management in a competitive banking environment. The total population for the study is 200 staff of UBA, Enugu state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers,accountants, customer care officers and marketers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


Chapter One


Introduction

1.1 Background of the Study

Firms are facing turbulent operating environments characterized by changing technologies and markets that represent both problems and opportunities. Technology has catalyzed this change and innovation is increasingly becoming the norm to keep pace with the ever changing needs of the customers. This has led to cut throat competition amongst business players; small, medium sized or large, each is striving to gain and maintain market leadership. With it has come great competition. Cut throat competition is virtually present in all markets and industries and is a major threat to the long term survival and prosperity of any organization (Dulo, 2006). In order to keep up with competition, firms must constantly search for a competitive strategy and practices that will ensure competitive advantage in the long term and yield market leadership. To successfully implement the intended strategies firms must deploy good strategic management practices which shall then be used to vehicle the adopted strategy in a competitive environment. What importance, value and energy a firm’s management has put to implement these practices demonstrates the intensity of their strategic management implementation. Developing a competitive strategy is thus basically developing a broad formula for how a business is going to compete, what its goals should be and what policies will be needed to carry out those goals. It is therefore a combination of the ends (goals) for which the firm is striving and means (policies) by which it is seeking to get there. In order for a business to achieve competitive advantage its competitive strategy should involve positioning a business to maximize the value of the capabilities that distinguish it from its competitors. Therefore the successful achievement of competitive advantage would result if a company is clear about its competitive strategy which may be cost leadership, differentiation or focus or a combination of competitive strategies. During the last few years, the banking industry has undergone a series of changes through financial reforms, advancement of communication and information technologies globalization of financial services and economic development. Those changes have had a considerable effect on efficiency, productivity change, market structure and performance in the banking industry. The increasingly competitive environment in the financial services market has resulted in pressure to develop and utilize alternative delivery channels. According to Koivu (2002), the rising need for convenient ways of accessing financial resources beyond the conventional norms has thus seen the recurrent expansion and modernization of banking patterns which has led to use of alternative channels gaining popularity as a competitive tool in the banking industry. The threat of none banking institutions and the dynamism that has become of the business environment, has left banks with no other choice other than to integrate the application of alternative channels in their strategies as a competitive tool. This provides the motivation for this study which intends to provide commercial banks in Nigeria with the necessary answers they may require to successfully apply strategic management intensity for the achievement of competitive advantage.


1.2 Statement of the Problem

The problem include

  1. A low growth of our put
  2. A persistent depreciation of naira exchange rate and its inflatimary effort on prices.
  3. High rate of unemployment
  4. Excessive of high borrowing rate which discourage productive investment
  5. Reduction activities in the manufacturing sector.

1.3 Objective of the Study

The objectives of the study are;

  1. To reduce uncertainty in decision making as far as possible by anticipating and planning for future events.
  2. To make management move in a systematic way and form a long term perspective, about concerns and short term decisions.
  3. To ensure that the external environment and trends in it are monitored for potential opportunities and threats.
  4. To provide a mechanism for systematic appraisal of the internal strengths and weakness of the organization.
  5. To provide a framework against which raw ideals for business development can be checked.
  6. To element in learning and motivation, enabling individuals to appreciate the role gauge than progress and evaluate the exact to which their effort and energy is being constructively spent.
  7. To organization need a yardsticks against which success or lack of it can be measured (if doesn’t know where it’s going or won’t know its arrival)
  8. To help management to predict organization behavior to some extent.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: there is no uncertainty in decision making as far as possible by anticipating and planning for future events.
    H1: there is uncertainty in decision making as far as possible by anticipating and planning for future events
  2. H02: there is no mechanism for systematic appraisal of the internal strengths and weakness of the organization.
    H2: there is mechanism for systematic appraisal of the internal strengths and weakness of the organization.

1.5 Significance of the Study

The main significance of the study is to examine the United Banks for Africa Plc carries out the strategies management in this area of deregulation. This research aims to describe and assess the following.

  1. The extent to which the banks engaged in strategic planning
  2. The opportunities and threats traced by the banks
  3. The factor militating against its competitiveness.

The study shall also take a look at the internal structure at the bank with particular reference to:

  1. The decision making and planning process
  2. The operational strength and weakness

Finally, the study tries to proffer solution ton problems being encountered and recommended alternative strategies.


1.6 Scope and Limitation of the Study

The scope of the study covers relevance of strategic management in a competitive banking environment. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.


1.7 Definition of Terms

Strategic Management:

Strategic management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies and ensuring that management rolls out the strategies across the organization.

Competitive:

Competition is, in general, a contest or rivalry between two or more entities, organisms, animals, individuals, economic groups or social groups, etc., for territory, a niche, for scarce resources,

Banking Environment:

The Chief Executives of some of the world’s largest banks created the Banking Environment Initiative (BEI) in 2010. Its mission is to lead the banking industry in collectively directing capital towards environmentally and socially sustainable economic development.


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was on relevance of strategic management in a competitive banking environment. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of strategic management in a competitive banking environment


5.2 Summary

This study was on relevance of strategic management in a competitive banking environment. Six objectives were raised which included: To reduce uncertainty in decision making as far as possible by anticipating and planning for future events, to make management move in a systematic way and form a long term perspective, about concerns and short term decisions, to ensure that the external environment and trends in it are monitored for potential opportunities and threats, to provide a mechanism for systematic appraisal of the internal strengths and weakness of the organization, to provide a framework against which raw ideals for business development can be checked, to element in learning and motivation, enabling individuals to appreciate the role gauge than progress and evaluate the exact to which their effort and energy is being constructively spent, to organization need a yardsticks against which success or lack of it can be measured (if doesn’t know where it’s going or won’t know its arrival),to help management to predict organization behavior to some extent, In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of UBA, Enugu state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers, accountants, customer care officers and marketers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

The study concludes that banks emphasize on research and development, technological leadership, and products and services. The organizations are always proactive and take the 1st step, proper and regular business controls that are able to measure the business position against pre-determined goals and objectives and have short term (5years) strategic goals. The study also concludes that explicit tracking of the policies and tactics of competitors are used by the firms to gather information about their business environment as well as special marketing research studies, gathering of information from suppliers and other channel members. The study also concludes that shifts in economic conditions are easily changed, the market entry of new competition, shifts in customer needs and preferences as well as modifications in supplier strategies and the emergence of a new technology. On planning horizon, the study concludes that considerable emphasis are placed on managing business strategies and firm investments at the top management level and board of director’s level.


5.4 Recommendation

The researcher draws the following recommendations for managerial policy and practice to enhance the improvement of the strategic intensity practices in the banking industry which will go a long way in enhancing their competitive advantage.


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