ABSTRACT
This research is focused on impact of strategic
management on growth and survival of an organization, using Union Bank of
Nigeira Plc as a case study. The project
is in chapters, from one to five. Literature review like the definition of
strategic management, concept of
strategic management, competition of an banking industry, the challenges and operating environment of
an organization, fraud in banking industry. The bank business environment and the
strategy formulation in bank. The problem militating against strategy planning
in achieving bank growth and survival. For effective research work two research
methods were used in collection of data which are primary and secondary
sources. The limitation of the research study was also discussed. Data’s were analyzed using three methods
which are simple average, weighted average/ means, and chi-square. The research project ended by summarizing the
entire project work, conclusions and recommendations were given, suggestion for
further studies and the bibliography to the research work.
TABLE OF CONTENT
Page
Title
i
Certification ii
Dedication
iii
Acknowledgement iv
Abstract v
Table
of Contents vi
- viii
CHAPTER ONE: BACKGROUND
OF THE STUDY
1.0 Background of the study 1
1.1 Statement of the problem 2
1.2 Research Questions 3
1.3 Research hypothesis 4
1.4 Purpose of study 4
1.5 Significance of the study 5
1.6 The scope of the study 5
1.7 Definition of terms 5
CHAPTER TWO:
LITERATURE REVIEW
2.1 Introduction 7
2.2 Definition of bank growth 8
2.3 Concept
of Strategic Management 10
2.4 Competition
in Banking Industry 12
2.5 Challenges
Facing Banking Industry 14
2.6 Bank
Business Environment 17
2.7 Strategy
Formulation in Banks
18
2.8 Strategic
Option to Banks 23
2.9 Relevance of Strategic Management to Banking 24
2.10 Problems Militating Against
Strategic Planning In
Achieving Banks Growth
and Survival 27
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1 Introduction
29
3.2 Research
Design 29
3.3 Restatement
of Research Questions 30
3.4 Restatement
of Research Hypotheses 30
3.5 Data
Collection Methods 30
3.6 Sampling
Plan 32
3.7 Research
Approach 32
3.8 Limitation
of the Study 33
3.9 Methods
of Data Analysis 33
CHAPTER FOUR: DATA PRESENTATION AND
ANALYSIS OF FINDINGS
4.0 Introduction
35
4.1 Respondents Characteristic and
Classification 35
4.2 Testing of Hypothesis 45
4.3 Analysis of Data 47
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATION
5.0 Summary of Major Finding 53
5.2 Conclusion 54
5.3 Recommendations 55
5.4 Suggestion
for Further Studies 57
Bibliography 59
Questionnaires 61
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
Banks
as a financial institution occupy a central position in various economic
systems. They are perhaps, the most efficient tool of economic development; never
the less they are regarded as the element that dictates the economy with
respect to variations in time and space.
The
Nigerian environment is enriched with mineral and agricultural resources. The
country is blessed with agricultural resources. Like wise, the country is
blessed with adequate supply of man power. These resources if tapped provide
attractive prospects to businessmen and investors thus, creating an avenue for
Nigeria to become a leading agricultural and industrial nation in the world.
The Nigerian economy experienced a rapid growth
in the early seventies (70’s) especially during the era of oil boom. The gross
domestic product (GDP) was estimated to have increased in real terms at an
average of 9%.
However,
the decline in oil revenue had led to country into pathetic recession/ naira
was seen as overhauled and the economy approved generally distorted.
Consequently, there was a high level of inflation and unemployment as well as
low industrial output amidst low capacity utilization.
In
1986, the government intervened to stream the economy by introducing the
structural adjustment programme (SAP). The programme among other things
spearheaded the deregulation of the economy there by creating more flexibility
enterprise. Since the introduction of structural adjustment programme. It has
been observed that the economy is still beset with problems which adverse
implications for suitable economy growth. These problems among others include:
a.
A low growth of output
b.
A persistent depreciation of naira
exchange rate and its inflationary effect on prices
c.
High rate of unemployment.
d.
Excessive high borrowing rate which
discourages productive investment.
The
government has stated its determination to do away the problems and return the
economy to a part of sustained and stable growth.
Consequently,
it would not hesitate to issue drastic direction and policies as long as they
fall in line. The implication of this is that business organizations including
banks must be able to maintain flexible structure and remain on their toes, in
order to exploit or adapt to new dimension that dominate in the economy.
1.1 STATEMENT
OF THE PROBLEM
Strategic
management to a large extent affects Nigerian banking system either positively
or negatively. It is therefore the responsibility of a bank to plan its
strategic management on growth and how to survive the test of the time.
It
is quite obvious that days of limited entry exclusive product market and
stationary protection are things of the past that does not exist in the era of
skiff competition and more aggressive banking. Only those banks that are able
to cope with the completion and dynamic of the prevailing environment wills
survive. It is only through strategic management that threats and challenges
that are presented by complexities of the banking environment can be checked
and considering the nature of the Nigerian economy and the frequency of fiscal
and monetary policy change as well as legislation whether these have any rapid
growth and survival of banking performance. Most banks have been distressed
today due to inability of the management to put in place strategies to solidify
the position of the bank. In view of the above, several problems have emanated
which have threatened the existence of several banks. Some of these problems
are as follows:
a.
Fall in the profit of the bank
b.
Liquidity problem
c.
Frequent changes of top management
d.
Increased incidence of fraud and robbery
attack
e.
Frequent changes of fiscal and monetary
policies
f.
Finally, most banks plan their
strategies on their needs and not on that of their customers.
1.2 RESEARCH
QUESTIONS
The
study shall proffer solution to the following research questions.
a.
Do banks need to formulate strategic
planning in order to accomplish its goals and objectives?
b.
How relevant is strategic management to
banking sector performance evaluation?
c.
What are the mechanisms for strategic
management?
d.
Does strategic management enhance bank
growth?
e.
Does strategic management aid in attaining
job satisfaction?
1.3 RESEARCH
HYPOTHESIS
i. Ho: Strategic planning does not improve banks
profitability
HI: Strategic planning improve banks
profitability
ii. Ho: Strategic management does not enhance bank’s growth and
survival.
Hi: Strategic management enhances bank’s growth and survival.
iii. Ho: Strategic management has no impact on job satisfaction.
HI: Strategic management has impact on job satisfaction.
1.4 PURPOSE OF STUDY
The
main purpose of the study is to examine the impact of strategic management on
growth and survival of an organization in this era of stiff competition, also
to determine the following:
a.
To determine whether banks needs to
formulate strategic planning in order to accomplish its goals and objectives.
b.
To determine how relevant is strategic
management to the growth and survival of an organization.
c.
To determine if strategic management
enhances banks growth and survival.
d.
To know the mechanisms for strategic
management.
e.
To determine if strategic management
help in attaining job satisfaction.
Finally,
the study shall proffer solutions to the problems encountered and recommend
alternative strategies.
1.5 SIGNIFICANCE
OF THE STUDY
As
a result of economic recession, which has made several banks in the country to close down, the study
had concerned itself with those factors
which should be viewed in a situation
when threats and opportunities present themselves to bank suddenly with the
frequency of fiscal and monetary policy
changes as well as legislation, the study shall view the growth and survival of this on bank performance.
Therefore, this study will be important to the banking industry. Also
recommendations will aid banks to increase its growth and profitability in the
competitive environment.
1.6 THE
SCOPE OF THE STUDY
Basically,
there are three levels in decision making hierarchy of business firms. These
are strategic level, tactical level and operational level. The study shall be
limited to strategic amendment at a corporate levels, with union bank of
Nigeria Plc (Head Office) as a case study.
1.7 DEFINITION
OF TERMS
There
are some terms used in course of writing this research work that need
definition. These key concepts in the research work may mean other things in the ordinary sense, but an attempts has
been made to interpret them as used in this research work:
a. Banking
environment: According to Bassey, G .E (2002), it is the macro – framework within
which the banking industry operates. It consist of the totality of factors
controllable and incontrollable industry to which banks have no direct control
on them, examples are industry, government, technology etc.
b. Performance: It
is a term used in form of terminology to represent positive economic
contribution and social well-being incurring less cost.
c. Planning: It
involves the establishment of strategies to achieve a set objectives of a given firm.
d. Products:
A product is a set of intangible physical attributes assembled in an
identifiable form. Each product carries a commonly understood description name
product attributes apparel to customers or their buying patterns.
e. Services: Services
is Stanton, W.J (2001) define it as those separating identifiable essential
intangible activities that provide want satisfaction and that are not necessarily tied to the sale of a product or
another service.
f. Strategies: According to Ituwe, C.O
(2006), they are carefully chosen plans of action which are geared towards the attainment of set target.
Characteristically strategies define the
resources method which are considered
essential for reaching set
target, usually this will involve ordering of priorities in the use of
resources. In other words, strategies is
a process of allocating resources.
g. Training Strategy: This
has to do with an appropriate move by a firm at the right time to move into a
target market to obtain profitability for the services to be rendered.
h. Top management: The
represent the decision makers of an organization.
i. Corporate planning: According to Taylor and Sparkes (2007), corporate planning is a
systematic exercise in determining the
total resources of an organization for the achievement of its qualified
objectives within a specific time frame.
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