ASSESSMENT OF STRATEGIC MANAGEMENT PRACTICES ON THE PERFORMANCE OF DEPOSIT MONEY BANKS IN SOUTH WEST, NIGERIA

Abstract

Strategic Management Practices (SMPs) have gained significance particularly in the Deposit Money Banks (DMBs). This is because of the pivotal role deposit money banks play in a country’s economic growth and development. This study was carried out with a view of improving the performance of DMBs through their SMPs in South West, Nigeria. Specifically, the study examined the extent of the adoption of SMPs among DMBs; assessed the effect of internal factors on SMPs among DMBs; evaluated the effect of external factors on SMPs among DMBs; and the effect of SMPs on the performance of DMBs. The study was based on an Ex post facto research design. South West (SW), Nigeria was used as the study area because virtually all the DMBs have presence in this region. Multistage sampling procedure was adopted. First, a purposive sampling technique for the selection of sixteen (16) banks out of twenty-two (22) DMBs due to their presence in all the state capitals of the six states in SW, Nigeria was undertaken. Random sampling technique was used for the selection of staff involved in the implementation of SMPs for each of the DMBs, while convenience sampling technique was used for the selection of customers at the selected branch offices. The study administered a structured questionnaire. The total number of respondents used as the sample size in the survey was seven hundred and sixty-eight (768) which included three hundred and eighty-four (384) each from both employees and customers of the DMBs. The data collected were then analysed using both descriptive and inferential statistical tools. The mean ranking technique and the Partial Least Square Structural Equation Modelling (PLS-SEM) were used for analysis. The results showed that the extent of the adoption of SMPs among DMBs in SW, Nigeria is relatively high with a mean score of 7.59 out of the maximum score of 10. Also, strategy implementation (7.69) and strategy formulation (7.66) were considered as critical indicators since their mean scores were higher than the grand mean score of 7.59. Furthermore, the results of the analysis showed that communication system (β = 0.299, and CI = 0.053, 0.514, p < 0.05), financial capacity (β=0.288, and CI = 0.123, 0.460, p < 0.05) and human capital (β=0.217, and CI = 0.004, 0.422, p < 0.10) had a significantly positive effect on SMPs. However, the effect of leadership style, organisational structure and organisational culture did not significantly influence SMPs. Similarly, results on the effect of external factors on SMPs showed that technology (β=0.440, and CI = 0.312, 0.572, p < 0.05) and political factors (β=0.394, and CI = 0.275, 0.517, p < 0.05) had a significant positive relationship, while economic and socio-cultural factors were not significant. The study showed that SMPs positively influenced the overall performance (β = 0.671, and CI = 0.544, 0.762, p < 0.05) of the DMBs in SW, Nigeria. Furthermore, SMPs had a significantly positive effect on employee promotion and retention (β=0.517, t = 7.249 and p < 0.05), a proxy for learning and growth perspective of DMBs’ performance. Likewise, SMPs had a significantly positive effect on the profitability (β=0.654, t = 11.300 and p < 0.05) of DMBs in the study area. The study concluded that SMPs played a significant role in determining the performance of DMBs. Consequently, the study then recommended that DMBs should regularly engage in SMPs and also ensure that the implementation of strategies was strictly carried out.