Strategic planning is a critical concept in the evolving business world where banks seek to remain competitive in a globalized market where changes are the order of the day. Strategic planning has become a standard part and practice of management in a large number of both private and public organizations. The primary benefit of strategic planning in banks today is its ability to promote strategic thinking, acting and learning among the personnel in the banking industry. The emergence of globalization has presented a number of challenges to banks ranging from a wide variety of needs that global consumers demand. Dealing with a multicultural society of customers requires effective strategies that will facilitate development of products that meet the tastes and preferences of the customers. Moreover, the changing technologies have presented a significant challenge to banks due to the complexity of the technological systems used in terms of usability, efficiency, security, convenience and cost (McAdan et al, 2002).It is evident from the current economic environment that technology is growing explosively making distance and time less relevant by the day. Therefore, change is occurring at an unprecedented rate and the bank leaders should be looking ahead anticipating change developing appropriate survival strategies to proactively and successfully navigate through the economic turbulence created by the changes.
Strategic planning provides banks with the purpose and direction by ensuring a proper balance of revenue and productivity initiatives. Lack of a proper strategic plan leads to business drift whereby the business will always react to daily pressures. Effective planning and implementation leads to exponentially higher rates of success in banks. Therefore, bank managers should be able to realize and accept that yesterday’s success does not necessarily ensure success in the future. Additionally, managers should continually challenge the status quo by changing behaviors, implementing new procedures, hiring different people and putting new systems in place in order to deliver the strategy successfully.
Delegate your assignment to our experts and they will do the rest.
Strategic plan is an important foundation on which all business activities can be appropriately connected and aligned. Creating a vision and direction that is simple and clear is important in setting up an appropriate framework for attaining the objectives of the banks efficiently. Therefore, a good plan should be developed by challenging the existing assumptions using input from within and outside the organization. In addition, the strategic plan should be executed effectively by ensuring that there is unwavering commitment from the top level managers in banks down to the junior employees. The commitment must be demonstrated through behavior, communication, investment and accountability. The stakeholders of the organization should fully understand and own the strategic plan in order to achieve the right attitudes and perspectives relating to the success of the business (Bikker et al, 2005). Furthermore, the plan should be incorporated into the organization culture and regularly updated to reflect changes in the business environment. Effective communication should be facilitated through various media and in terms that appropriately connect individuals and their respective roles to the vision and success of the organization. Therefore, the primary objective of the communication is to make the employees to fully understand the vision and the strategy of the organization.
Strategic planning is important in making better business decisions based on the vision and the strategy of the organization in terms of hiring and rewarding the right people, adopting and developing the right systems as well as making the right investments(Bikker et al, 2005). Strategic planning also eliminates conflicts and confusion of priorities by rallying people behind a common cause. High retention and growth also improves customer satisfaction hence ensuring competitive advantage over other competing businesses. Moreover, strategic planning promotes intellectual and creative capacity of the organization that facilitates collective work towards developing solutions. Effective organizational positioning can be achieved by developing a good strategic plan. Therefore, it is clear that strategic planning is fundamentally important in improving performance of banks.
Literature Review
There is a lot of research that has been done in the field of strategic planning especially in banks. Strategic planning is a long term initiative that provides purpose and direction in an organization (McAdam et al, 2002). Therefore, strategic planning is viewed as an essential component of an organization that determines success and growth. The performance of a bank is measured by how customers are satisfied, profitability and operating expenses (Bikker et al, 2005). Strategic planning spans across several years whereby the firm assesses the current organization situation and project the possible growth of the organization over several years. The internal and external environment is scanned to identify the strengths, weaknesses, opportunities and threats so that the organization can develop an appropriate framework necessary to attain the projected growth in terms of performance. The real purpose of a strategic plan is to determine the external focus of the business in terms of the customers served and the value provided as well as the areas in which the organization must excel in order to be successful (Harrington et al, 1995). A well-developed strategic plan provides a roadmap and the specific role that each individual should play in order to attain the objectives. The organization should also communicate its commitment regarding the strategic plan and rally all the players behind the cause.
The organizational structure should be analyzed regularly to establish whether it is well suited to the existing strategy. The management should be flexible enough to adapt to the changes in the economic environment. The information obtained from the environmental analysis should be appropriately applied in the business situation to fill the performance gaps. The organization should also facilitate changes in attitudes, culture and policies in the workplace to drive desirable change.
When the desired performance levels are not attained in an organization, strategic plans are considered necessary (Parnel, 1994). Strategic planning therefore is important in improving the performance in organizations especially banks. Creating a vision and direction that is simple and clear is important in setting up an appropriate framework for attaining the objectives of the banks efficiently. Therefore, a good plan should be developed by challenging the existing assumptions using input from within and outside the organization. In addition, the strategic plan should be executed effectively by ensuring that there is unwavering commitment from the top level managers in banks down to the junior employees. The commitment must be demonstrated through behavior, communication, investment and accountability (Harrington et al, 1995). The stakeholders of the organization should fully understand and own the strategic plan in order to achieve the right attitudes and perspectives relating to the success of the business. Furthermore, the plan should be incorporated into the organization culture and regularly updated to reflect changes in the business environment. Effective communication should be facilitated through various media and in terms that appropriately connect individuals and their respective roles to the vision and success of the organization (Chabra, 2008). Therefore, the primary objective of the communication is to make the employees to fully understand the vision and the strategy of the organization. Most top managers believe that strategic plans increase the ability of organization to increase customer satisfaction, revenue and market share in the competitive environment. Poor organization performance is always attributed to lack of an effective strategic plan in place (Ansoff, 1990).
Strategic planning is also important in effective resource utilization (Bikker et al, 2005). Efficient use of the factors of production translates to increased organization performance. Use of the right technology in business reduces the costs resulting from poor technology. Strategic planning facilitates hiring and rewarding the right personnel in organization. Effective resource mobilization ensures continuous flow of business activities hence increasing efficiency. Effective methods of managing and carrying out important tasks in the organization can be developed leading to reduced costs of production.
Strategic flexibility is also considered an effective model of strategic planning (Fang et al, 2007). An effective strategic plan should accommodate unprecedented changes as a result of market shifts or emergence of new opportunities. Flexibility in strategy development and implementation facilitates improvement in business performance because the organization will always be able to adapt to the changes efficiently. This ensures that the market needs are met on time hence increasing the market share.
Research Body
Strategic Planning
Strategic scans of both internal and external environment are used to formulate, implement and evaluate the success of the strategy (Parnel, 1994). Strategic planning is comprised of all practices aimed at improving the performance of the organization amid the turbulence in the global economy. There is increased competition, advanced technology needs, research and development needs and employee training among others. Therefore, the banks should adopt deliberate strategies that will put them ahead of the competition in the business environment.
The strategic planning process should involve the development of the organization vision, mission and objectives. The strategic decisions developed should enhance positive relations with the external environment. The input from all the functional areas of the organization should be consistent with the vision of the organization. The administrative and operational activities in the organization determine the direction of the firm in a fundamental way.
The strategy is therefore encompasses the direction and scope of an organization over the long term. The objective of the strategy is to achieve advantage for the organization by deliberately configuring resources in relation to the changing needs in the environment. Elaborate industry analysis is vital in designing a cohesive strategy for the organization. A good strategic plan therefore will be capable of guiding the steps of the organization towards achieving its goals.
Strategic planning process
The strategic planning process may take several approaches. However one of the approaches will be outlined. Strategic planning is important in improving the performance in organizations especially banks. Creating a vision and direction that is simple and clear is important in setting up an appropriate framework for attaining the objectives of the banks efficiently. Therefore, a good plan should be developed by challenging the existing assumptions using input from within and outside the organization (Harrington et al, 1995). In addition, the strategic plan should be executed effectively by ensuring that there is unwavering commitment from the top level managers in banks down to the junior employees. The commitment must be demonstrated through behavior, communication, investment and accountability. The stakeholders of the organization should fully understand and own the strategic plan in order to achieve the right attitudes and perspectives relating to the success of the business. Furthermore, the plan should be incorporated into the organization culture and regularly updated to reflect changes in the business environment.Strategic planning assumes a cooperative effort between the bank’s board and employees. The following therefore is an outline of an effective strategic planning process.
The first step in the strategic planning process is agreement on a strategic planning process. The strategic planning committee should provide an understanding of what strategic planning is and how it will be done. The potential value to the organization in terms of providing common vision and focus should also be discussed in order to encourage full participation as well as contribution from all the participants. The costs of doing the strategic plan in terms of staff and board time and other resources as well as well as the opportunity costs involved should also be considered. The prospect of making a long term or short term strategic plan should also be discussed to ensure that the organization gets ready for the activity. The procedures to be used in establishing and implementing the strategic plan should be agreed upon. Finally, the committee can then establish responsibilities for the various steps in the strategic planning process.
The second step in the process of strategic planning is carrying out an environmental scan. Environmental scans assist in understanding how the organization relates to it environment. The scan always includes an external component which identifies and assesses the opportunities and threats in the external environment together with the internal component that assesses organizational strengths and weaknesses. The process is often referred to as SWOT analysis. The external forces include political factors, social factors, technological factors and legal factors. The opportunities and threats identified in the external scan should be established. Furthermore, actual and potential collaborators and competitors should also be identified. The internal component of the environmental scan includes the assessment of the organization’s strengths and weaknesses. The internal factors therefore are human resource, operational strategies and results or outcomes. In a case where the organization lacks extensive objective measures of its outcomes, perceived performance can be partially establishedthrough asking clients and stakeholders. At such a point, critical success factors for the organization should be identified. The key success factors help in measuring the success of the organization. Furthermore, formalization of organizational values and operating principles can be done as they are helpful in defining the organization.
The third step in the strategic planning process is the identification of key issues, questions, and choices to be addressed as part of the strategic planning effort. The strategic issues that the organization should address may be specified and priorities set according to importance and time. Thereafter, the strategic planning group may work to identify strategic issues emerging from the environmental scan and then prioritize them in terms of time and importance and feasibility. The discussion of the issues should generate some level agreement about the choices set to be considered and the decisions to be made as part of the strategic planning process.
The fourth step of the strategic planning process is defining and reviewing the organization’s values, community vision and mission. Agreement should be arrived at as to why the organization exists, the goals it seeks to achieve, what it stands for and whom it serves in the market. Organization’s core values refer to beliefs or principles that guide the organization and are not easily changed as they form part of the organization culture. The community vision represents the image that the community would like if the values of the organization were shared and practiced by everyone. The mission states the purpose for the organization’s existence or the organization’s public statement.
Development of a shared vision for the organization is the fifth step of the strategic planning process. It is a description of the organization in five years in terms of target area, target populations, budget, percentage funding from public and private sources, staff size and composition, structure, program areas, locations, relationship with private sector and relationship with public agencies. Developing a shared vision is always good when all the stakeholders participate in the activity.
The sixth step is development of a series of goals which describe the organization in a specified number of years. It is observable that the vision is always related to the goals. It is very important to ensure that the vision is effectively transformed into a series of goals for the organization. The goals should effectively describe the organization in the form of status statements.
The seventh step of the strategic plan is to agree upon key strategies to reach the goals and address the key issues identified in the environmental scan. The broad strategies should be emphasized. The strategies should be closely related to the specific strategic planning goals. The present organization situation should be analyzed in relation to where the vision and goals indicate it wants to be so as to identify the strategies to get there. The specific criteria for choosing and evaluating among the strategies should be agreed upon. The strategies should be analyzed in terms of value, appropriateness, feasibility, cost benefit, acceptability and timing.
The eighth step of the strategic planning process is the development of an action plan addressing goals and specific objectives and work plans on annual basis. The specific work plans to begin implementation should be developed upon completion of long term elements of the strategic plan. Therefore, the strategies adopted must reflect current conditions in the organization. Developing objectives and annual work plans requires both board and staff to participate in the activity.
The second last step in the strategic planning process is the completion of the written strategic plan summarizing the results and decisions of the strategic planning process. It is important to indicate the output expected at each stage to enhance clarity and a sense of purpose.
The final step of the strategic planning process is the formulation of procedures for monitoring and modifying strategies based on changes in the external environment. The progress towards the goals and objectives as well as the use of strategies should be closely monitored regularly to establish the effectiveness of the strategies. The procedures for taking advantage of unexpected changes should be put in place for example improvements in the economy, changes in the local funder priorities or changes in the target population.
Proper development of a strategic plan stimulates the growth of any particular organization because it facilitates clarity of purpose. Additionally, strategic planning improves the performance of the organizations by facilitating efficient resource allocation and strategic approaches in operations.
Bank’s Performance
Banks performance refers to the actual output of the bank as measured against its goals and objective. Bank performance encompasses three specific areas of firm outcomes. The key performance areas include financial performance, product market performance and shareholder return. The key result areas outcomes are determined by availability of resources to the organization. Competent personnel are important in translating the strategies into action. The bank’s management should also be committed to the cause of achieving the set organization goals.
After the financial crisis that began in 2008, banks took steps to improve their performance measurement capabilities as a result of economic and market conditions as well as the new management needs that arose. New regulatory structures were instituted hence affecting the underlying economics of banks in terms of payment-card issuing costs and processing capital requirements increased. New channels of money transfer like mobile phones have brought intense communication making banks to seek more ways of attracting customers. The banks began deepening relationships with customers while enhancing product mix and appropriate pricing decisions (Chabra, 2008). There are some emerging factors that banks are putting emphasis in the market as follows;
Review and enhancement of organizational management profitability reporting methodologies
Encouraging use of business unit key performance indicators.
Improving customer relationship practices
Conducting channel profitability analysis
Alignment of components of the performance management process
Enhancing system support and automation of performance management process
Improving data quality and consistency
Importance of Strategic Planning on Bank’s Performance
Making profits may seem the ultimate measure of a bank’s performance. However, there are several indicators of good performance by banks apart from only making profits which include motivated staff, customer satisfaction among others. A well thought out strategic plan is the most important factor in ensuring long term success of banks. Achievement of good financial results should be accompanied by good strategic performance. Strategic performance encompasses output growth, technical progress, efficiency, shareholder value addition, economic value addition and competent human capital.
The bank’s performance in terms of strategic wellbeing, competitiveness and market position is crucial. Moreover, the performance of the bank in the market place should reflect competitive strength and market penetration. Strategic planning is important in improving performance because it effectively defines the scope and direction of the business rather depending on mere extrapolations of past performances to project the future performance (Ansoff et al, 1990). Rapid changes, technological advancements, globalization and market competition necessitated adoption of strategic planning as a critical management tool. Therefore, it is evident that strategic planning is essential in improving bank’s performance. Therefore, strategic planning has facilitated improvement in bank performance in the following ways;
Cost allocation
Cost allocation methodologies are being changed to provide more transparency to users. Proper cost allocation methodologies facilitate development of better decisions regarding the use of the bank’s resources. This there increases the performance of the banks in terms of resource use and management. Proper cost allocation is an important strategy used by banks to streamline cost reporting in order to enhance use of quality and accurate data in reporting.
Funds transfer pricing
The funds transfer curves are being transformed in banks. The liquidity premiums are being added to reflect the banks specific funding costs at each point in the curves. The information obtained from the analysis of funds transfer pricing is used to make strategic decisions that will help in improving performance.
Credit charges
New strategic approaches have been used to assign provisions for credit losses. Use of Basel-driven expected losses versus GAAP provision is being evaluated in terms of feasibility and efficiency.
Capital allocation
Banks that attribute equity to lines of business for purposes of organization profitability are slowly changing their approach. As a result of raised regulatory capital requirement, banks are not limited to use of economic capital calculations as the primary bases for line of business capital attribution. Alternatively, combinations of economic capital, regulatory capital and goodwill attributions are used (McAdam et al, 2002).
Inter-line of business revenue and expense-sharing arrangements
Banks have reviewed the methods by which revenues and expenses are shared among the lines of business. As such, the banks are encouraging cross-selling as well as understanding the true stand-alone value of each business line in the bank. This approach will ensure that the bank’s performance is effectively measure to facilitate improvements in points where weaknesses exist. The necessary measures are then taken to increase the performance of the banks.
Line of business key performance indicator analysis
Banks executives continually look for measures to assist them in understanding potential future bank performance as well as analyzing historical data regarding financial performance. Determining the appropriate key performance indicators to be used requires development of a business model and analysis of the levers that have the greatest impact on performance. In addition, definition of levels in the lines of business hierarchy at which the key performance will be reported should be done.
Improving profitability
Most banks have incorporated customer centric strategies in developing value propositions to customers. The strategies involve customer segmentation, needs and behavior analysis, product features, sales and service delivery channels, process design and pricing strategies among various other attributes (Ansoff et al, 1990). Therefore, banks need a deep understanding of customer profitability and economies of annual and lifetime value bases.
Understanding which customers or groups of customers are associated with profitability and why provides the banks with important information necessary to make appropriate marketing and pricing decisions. More service delivery channels such as online and mobile platforms are being integrated with the traditional channels like branches, call centers and automated teller machines. Investments in the channels must be strategically optimized. As a result, banks are improving their analyses of channel economics that involve developing models of channel usage, usage patterns as well as impact on sales and customer relations.
Aligning performance components
Banks are striving to ensure that the components of the performance management process constitute definitions, hierarchies and methodologies (Bikker et al, 2005). Stress testing has also been used repeatedly along forecasting. Moreover, consistent capital attribution methodologies are being used for strategic planning, capital budgeting, reporting and forecasting. Aligning performance management components is essential in improving overall performance of banks.
Improving system support and automation
Banks have been in the forefront in undertaking a variety of technological initiatives to streamline and automate components of their performance management process (Adegbie et al, 2013). The initiatives comprise implementing new financial planning and budgeting systems, development of new forecasting and stress testing systems. In addition standard monthly reporting processes such as cost allocation have been automated. The criteria for such performance management systems and automation investments vary and can include reducing operational cost, reducing operational cost, reducing production cycle times, improving controls and vendor support. Improving system support and automation is an effective way of improving bank performance.
Investing in data availability, quality and consistency
Banks have been able to pull together complete and accurate reports of their positions, exposures and counterparties. Data gaps and inconsistencies had for a long time affected the effective performance of stress tests. Improvements in data quality are necessary in running banks effectively as well as improving performance. Data used in the process of performance management should be consistent in terms of accuracy and quality. The key data improvements in the banking industry play a pivotal role in enhancing proper performance management and reporting in terms of data governance, data sourcing and data quality (McAdam et al, 2002).
Employee motivation
Through strategic planning, banks have been able to unearth effective ways of actively involving employees in attainment of the business goals and objectives. Motivation is the complex set of forces that keep a person at work in an organization (Chabra, 2008). Motivation determines the way people work and perform in the organization. The more employees are motivated, the more they become productive at work. However, different employees are motivated by different things depending on their priorities.
Fortunately, banks have the best reward systems for employees. Team building is also facilitated hence promoting the influence of group dynamics in the workplace. The banks have realized that motivated employees are productive and creative at work. Productive and creative employees improve the performance of banks significantly because they are able to contribute positively in decision making as well as implementing the necessary policies and procedures at work.
New product development
Strategic planning has facilitated use of customer centered strategies that make it possible to develop new product ideas. The valuable information used in the crafting of new products is obtained from customers by use of suggestions and feedback. Taking the needs of low income and vulnerable customers can generate product improvements which may benefit other customers as well (Muzellecand, 2006). Designing with an objective to ensure affordability, accessibility and social value creation can result in products that effectively create competitive advantage in the market, by tapping into new markets and building positive customer and employee relations. The organizations must follow clear principles, practices and guidelines when interacting with it customers. Therefore, the banks have opened up online channels through which customers can forward their suggestions, compliments and complaints. The relationships should not be limited only to direct interactions such as sales or service delivery but should provide an opportunity to forecast and analyze the customer trends and behaviors which serve to enhance the customer experience and development of products that effectively meet the customer needs.
Rebranding
A brand is more than just a physical product or service because it also helps to build relationship with customers. A brand is important especially where the organization has no direct contact with the customers. Organization’s product branding is important in in ensuring continuous profitability in the company. An effective brand has unique attributes that can only be associated with it. Therefore, the brand elements refer to the added value that often differentiates one product from another far from the core and functional benefits sought by the customer. The unique characteristics attract customers to the product.
Rebranding refers to the change in the product operational and physical attributes of a product in order to attract more customers towards it and change the overall customer perception. Rebranding is always meant to ensure that the targeted customers minds and perceptions are changed totally about the product, service or the organization (Adegbie et al, 2013). Brands that have value help organizations to achieve the objectives set. Improved organization outcomes after rebranding demonstrate the effectiveness of rebranding in the marketing of goods and services.
Banks have always rebranded in order to reposition themselves in the minds of customers in terms of quality, stability or reliability. Moreover, banks have also merged as well as rebranding by combining their former brand attributes to come up with a stronger hybrid brand.
Customer care
Banks have begun to value good customer service by spending more money in training employees than average organizations do as well as proactively interviewing customers for feedback. Customer service plays a critical role in an organization’s ability to generate income and revenue (Chabra, 2008). Therefore, customer service should be included as part of the overall approach to systematic improvement. Customer service has a great potential of changing the entire perception a customer has of the organization therefore influencing business success fundamentally. Businesses therefore should realize that every contact their customers have with their business is an opportunity to improve their reputation with the customers and increase the likelihood of further sales.
Good customer care involves putting systems in place to maximize the customers’ experience with the business. Therefore, customer care should be a prime consideration of any particular business that seeks to improve sales and increase profitability. In addition, the staffs that deal directly with customers should be effectively trained on customer care skills in order to improve customer satisfaction as well as repeat sales. Banks have been able to improve on customer care as a result of strategic planning initiatives.
Discussion
There is need for banks to have well developed strategic plans which guide them in achieving the set goals and objectives. The banks should scan the environment and develop a strategic plan against the resources available. The objective and goals laid down should be consistent with the vision of the organization. The strategic plan should be monitored regularly in terms of the strategies developed in order to evaluate the progress made by the organization in implementing the strategic plan.
Therefore, a good plan should be developed by challenging the existing assumptions using input from within and outside the organization. In addition, the strategic plan should be executed effectively by ensuring that there is unwavering commitment from the top level managers in banks down to the junior employees. The commitment must be demonstrated through behavior, communication, investment and accountability. The stakeholders of the organization should fully understand and own the strategic plan in order to achieve the right attitudes and perspectives relating to the success of the business (Harrinton et al, 1995). Furthermore, the plan should be incorporated into the organization culture and regularly updated to reflect changes in the business environment. Effective communication should be facilitated through various media and in terms that appropriately connect individuals and their respective roles to the vision and success of the organization. Therefore, the primary objective of the communication is to make the employees to fully understand the vision and the strategy of the organization.
Lack of a proper strategic plan leads to business drift whereby the business will always react to daily pressures. Effective planning and implementation leads to exponentially higher rates of success in banks. Therefore, bank managers should be able to realize and accept that yesterday’s success does not necessarily ensure success in the future. Additionally, managers should continually challenge the status quo by changing behaviors, implementing new procedures, hiring different people and putting new systems in place in order to deliver the strategy successfully. The banks should motivate the employees effectively in order to ensure that they are productive as well as creative in the organization. Banks have the best reward systems for employees. Team building is also facilitated hence promoting the influence of group dynamics in the workplace. The banks have realized that motivated employees are productive and creative at work. Productive and creative employees improve the performance of banks significantly because they are able to contribute positively in decision making as well as implementing the necessary policies and procedures at work. As such, the personnel should be appropriately rewarded and trained so as to contribute positively towards attainment of goals and objectives of the banks.
Good customer care is also a major determinant of bank performance. Banks have shown great improvement in comparison to other businesses in improving customer care (Muzellecand, 2006).Customer service plays a critical role in an organization’s ability to generate income and revenue. Therefore, customer service should be included as part of the overall approach to systematic improvement. Customer service has a great potential of changing the entire perception a customer has of the organization therefore influencing business success fundamentally (Chabra, 2008). Businesses therefore should realize that every contact their customers have with their business is an opportunity to improve their reputation with the customers and increase the likelihood of further sales. Effective customer care ensures that relevant systems are put in place to maximize the customers’ experience with the business. Therefore, customer care should be a prime consideration of any particular business that seeks to improve sales and increase profitability
An effective strategic plan analyses the existing conditions in the environment in order to come up with effective strategies.Environmental scans assist in understanding how the organization relates to it environment. The scan always includes an external component which identifies and assesses the opportunities and threats in the external environment together with the internal component that assesses organizational strengths and weaknesses. The process is often referred to as SWOT analysis. The external forces include political factors, social factors, technological factors and legal factors. The opportunities and threats identified in the external scan should be established. Furthermore, actual and potential collaborators and competitors should also be identified. The internal component of the environmental scan includes the assessment of the organization’s strengths and weaknesses. The internal factors therefore are human resource, operational strategies and results or outcomes.
Strategic plan is an important foundation on which all business activities can be appropriately connected and aligned. Creating a vision and direction that is simple and clear is important in setting up an appropriate framework for attaining the objectives of the banks efficiently. Therefore, a good plan should be developed by challenging the existing assumptions using input from within and outside the organization. Furthermore, the banks should carry out regular monitoring and evaluation by using appropriate tools to measure success or failure of the strategies adopted. The progress towards the goals and objectives as well as the use of strategies should be closely monitored regularly to establish the effectiveness of the strategies. The procedures for taking advantage of unexpected changes should be put in place for example improvements in the economy, changes in the local funder priorities or changes in the target population.
Strategic planning is an important component of management in banks based on the findings in this paper. There is increased competition, advanced technology needs, research and development needs and employee training among others. Therefore, the banks should adopt deliberate strategies that will put them ahead of the competition in the business environment. Therefore strategic planning proves to be an essential instrument for strategic planning and forecasting hence positioning the bank to meet the changes which may come up in the course of delivering its mandate. Corporate performance is dependent on policies and planning for every bank. Therefore, thorough support of strategic planning and its execution will ultimately lead to greater performance in banks. Positive strategic planning therefore affects the performance of banks positively. The choice of strategies to be adopted at a given point in time is informed by different factors from within or without the bank. Strategic planning is therefore significant to the overall performance of the organization. However, different measures of strategic planning give proportional variations in efficiency and performance.
References
Adegbie, F.R., &Fakile, S.A. (2013), Strategic planning and performance: Catalysts for sustainability and stability in the Nigerian financial sector. European Scientific Journal ,9 (25).
Ansoff, I. and McDonnell, E., (1990). Implanting Strategic Management, 2 nd Edition Prentice Hall.
Bikker, J.A. &Bos, J.W.B. (2005) Trends in competition and profitability in the banking industry: a basicframework, Suerf Series 2005/2.
Chabra P (2008), Human Resource Management, 2nd Edition, Sultan Chand and Sons Education Publishers, New Delphi
Harrington, H., Harrington, S. (1995). Total Improvement Management. New York: McGraw-Hill, Inc
McAdam, R. and Bailie, B. (2002). "Business Performance Measures and Alignment Impact on Strategy", International Journal of Operations & Production Management , Vol. 22 No.9, pp.972-96
Muzellecand L. (2006) on the Customer relationship management (CRM) in business- to business (B2B) e-commerce, John Wiley, Sidney, Australia
Parnell, J.A. (1994)"Strategic Consistency Versus Flexibility: Does StrategicChange Really Enhance Performance?" American Business Review 12: 22-30
