THE EFFECT OF STRATEGIC MANAGEMENT ON ORGANIZATIONAL PERFORMANCE OF NIGERIA DEPOSIT INSURANCE CORPORATION

ABSTRACT

The study examined the impact of strategic management on organizational performance using NDIC as case study. The study established that strategic management is the process that deals with the fundamental  organizational renewal and growth with the development of strategies, structures and systems necessary to achieve such renewal and growth, with the organizational systems needed to effectively manage the strategy formulation and implementation processes.

The study adopted the descriptive survey design. The population of the study comprised 1, 860 employees of NDIC at junior, senior and management positions. The sample size of study is 186 employees, which is 10% of the population. The data collected were analyzed using descriptive statistics, and the regression analysis was utilized to test the research hypotheses at 5% level of significance.

The study found that respondents cohesively agreed that the practices of strategic management practices with reference strategic planning, strategic implementation and strategic evaluation and control are duly observed in the organization. Furthermore, the results of the regression analysis showed that (a) strategic planning has substantial impact on the stakeholder satisfaction about of NDIC (β=0.124; p<0.05); (b) strategic implementation has tremendous impact on public confidence in NDIC (β=0.128; p<0.05); and (c) strategic evaluation and control has robust effect on the adequacy of deposit insurance funds of NDIC (β=0.214; p<0.05)

The study concluded that strategic management practices (strategic planning, implementation and evaluation and control) has strong effect on organizational performance (in terms of stakeholder satisfaction, public confidence and adequacy of deposit insurance funds) of NDIC. The following suggestions were proposed; It is pertinent for NDIC to have a detailed strategic vision, and must be communicated to all employees in every cadre; Management of NDIC should adopt and implement corrective strategic measures to smoothen the difficulties experienced by the organization; Management of NDIC is urged to heavily prioritize on strategic management practices; Management of NDIC should carry out a comprehensive study on the implementation of strategic management practices in order to reposition and restructure the operational activities of the organization; Management of NDIC is encouraged to develop sub-strategic plans due to the highly dynamics of the Nigerian business environment, turbulence in market and the intensity of competition, which can nullify the potency of strategic management.

    CHAPTER ONE

   INTRODUCTION

1.1      Background to the Study

The business of the 21st century regardless of its size is going to be part of the global business community affecting and being affected by social changes, events and pressures from around the world (Olanipekun, 2014). This is so because the business environment is changing, dynamic, turbulent and highly competitive. In this period, the relationship between business and society has changed radically. The 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 (Dauda, Akingbade & Akinlabi, 2010). The competitive business environment has resulted into complexity and sophistication of business decision-making which requires strategic management. The management of various and multifaceted internal activities is only part of 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 would facilitate the optimal positioning of the firm in its competitive environment. Strategic process allows more accurate anticipation of environmental changes and improved preparedness for reacting to unexpected internal and competitive demands (Umar, 2008).

Porter (1990) argued that the essence of formulating comprehensive strategy is to relate an organization to its environment. According to Oyedijo (2012), a clearly defined strategy that would lead to enthusiasm among various stakeholders which include shareholders, employees, creditors, customers and suppliers, and would promote commitment that would enhance better performance of business organizations. Strategic management permits the systematic management of change. It enables an organization to purposefully mobilize resources towards a desired future. In the globalization era, strategic management has been considered as the most important practices that differentiates organizations from each other (Sharabati & Fuqaha, 2014). 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 ensure they fit into their environment.