1.1 Introduction
The decision-making process is referred to as strategic management. Another name for it is strategic planning. The course of action and direction known as strategic management culminates in the creation of a winning plan that aids in the accomplishment of organizational goals. Success as an entrepreneur is largely determined by the thoughtful selection and appropriate use of resources. Colotla et al. (2013) state that an organization's productivity and profitability are determined by how well it has performed in gaining a competitive advantage over its rivals in the marketplace and growing its market share. Consequently, a company is said to be doing well if it can outperform its competitors in terms of profitability by taking use of a strategic advantage. A core competency is a unique and hard-to-replicate aspect of the firm that can be the source of competitive advantage (Colotla et al., 2013).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
Strategic management has been regarded as the key activity that sets firms apart in the globalization era. It is a crucial procedure for accomplishing the goals, mission, strategy, and vision of the organization. To accomplish its aims and objectives, it is the management of organizational resources (Pearce & Robinson, 2017). Organizational productivity and profitability can take various forms, including technical and/or subject matter know-how, a reliable process, and close relationships with customers and suppliers (Mascarenhas et al., 2015). Product development or company culture elements like a committed and driven workforce may also be included. Efficiency is deemed to be a sustainable competitive advantage if it provides the company with a long-term benefit. Businesses must not only succeed locally but also endure over the long term in order to provide a desirable productivity and compete successfully both locally and worldwide.
Kotler (2012) defines strategic management as the managerial process of creating and preserving a workable match between an organization's goals, its human capital, and its shifting market prospects. Any organization that practices strategic management goes through two stages, one of which is deciding what goods or services to manufacture and/or provide. It also entails choosing the appropriate marketing and/or manufacturing plan to implement in order to deliver the desired good or service to the right customer. The entire range of business strategies and competitive maneuvers that an organization uses to carry out its operations is referred to as strategic management.
Peng and Tan (2011) point out that it's interesting that Western and multinational firms' experiences have shaped a large portion of our knowledge about successful organizational efficiency and profitability. Organizational productivity is generally considered to be the outcome of and linked to a lengthy variety of influencing factors. Operational efficiency, organizational structures, composition and style of the top management team, human resource management, manipulation of political and/or social influences encroaching on the market, adherence to different interpretations of socially responsible behavior, international or cross-cultural expansion and adaptation activities, and a host of other phenomena at the organizational and/or industry level (Flint et al., 2012; King, 2014).
General management theory is based on the fundamental tenet that strategy content affects organizational performance. The way top managers react to possibilities and limitations they encounter is known as their strategy. Private companies can exercise strategic choice even in the face of external restrictions, according to prominent management theories like those of Chandler (2012) and Child (2007), which are cited in Meier, O'Toole, Boyne, and Walker (2006). The organization's entire success and development may be impacted by how they handle strategic challenges. Since policy-making and functional-area integration alone could no longer meet a corporation's demands, the planned policy paradigm became obsolete due to the business environment's accelerated changes and growing complexity (Ilesanmi, 2011).
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Effect of Strategic Management in Organizational Performance and Growth.
1.3 Statement of Problems
Investigation revealed that the majority of Nigerian organizations blame poor funding, unfavorable market conditions, and unacceptably low-quality products for their demise. Ikemefuna (2010) noted that the main reasons why businesses fail are inadequate planning, a lack of vision, and a mission. But according to Mintzberg (2011), strategic planning is a difficult, multifaceted process that leads a company into unexplored terrain. Rather than offering a ready-to-use recipe for success, it guides the organization through a process that creates the framework and environment in which the solutions will become apparent.
Consequently, the primary concerns of this study are issues related to haphazard planning, issues of not giving the business environment enough weight, and issues of hiring managers who lack the necessary qualifications to carry out effective strategic management in order to keep up with the productivity and profitability of business organizations in Nigeria. There are business groups in Nigeria that either don't have official plans at all or operate without following those that do. A few contended that plans are useless because the market is changing so quickly. Every business organization has a destination in mind, but sadly, some are aimless and will follow any path to reach their destination. This highlights how important it is for businesses to apply strategic planning ideas.
Strategic management implementation has been challenging too many organizations. They crunch vast amounts of consumer data, hold planning sessions frequently, and use various techniques to develop strategy. Still, they miss the mark a lot of the times. Some strategic management problems faced by organizations include;
- Companies tend to ignore one complication along the way: They can’t develop models of the increasingly complex environment in which they operate. As a result, contemporary strategic-planning processes don’t help enterprises cope with the big problems they face.
- Several Chief Executive Officers (CEOs) admit that they are confronted with issues that cannot be resolved merely by gathering additional data, defining issues more clearly, or breaking them down into small problems. Their planning techniques don’t generate fresh ideas, and implementing the solutions those processes come up with is fraught with political peril.
- Most Organizations do not progress at all walloping in serious planning problems.
Therefore, there is need to investigate why the above problems persist and examine ways by which strategic management could assist.
1.4 Aim and Objectives of Study
The aim of the study is to investigate the Effect of Strategic Management in Organizational Performance and Growth. In achieving this aim, the following specific objectives were laid out as follows:
- To ascertain the impact of strategy evaluation and control on business expansion of organizations in Nigeria;
- To appraise the value of strategic management concepts and techniques as applied to organizations;
- To investigate the role of strategic management on organizations productivity;
- To examine the impact of strategic management in organization’s success; and
- To provide some guidelines with which organizations can apply the strategic management ideas and skills, in a time-saving manner.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Are the values of strategic management concepts and techniques applied to organizations?
- What is the role of strategic management on organizations productivity?
- What is the impact of strategic management in organization’s success?
- What is the impact of strategy evaluation and control on business expansion of organizations in Nigeria?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: Strategic management plays no significant role on organizational productivity
- H1: Strategic management plays significant role on organizational productivity.
Hypothesis Two
- H0: Strategic management is not an important function of management
- H1: Strategic management is an important function of management.
Hypothesis Three
- H0: The productivity and profitability of an organization is not based on strategic management
- H1: The productivity and profitability of an organization is based on strategic management
1.7 Significance of Study
The significance of this research is to stimulate management’s awareness of the strategic implication of environmental events and internal decision. Strategy is needed to focus effort and promote coordination of activities. Without strategy an organization becomes bunch of individuals, hence strategy is required to ensure collective actions and concentration of efforts towards achieving organizational plans and objective.
The findings of this research will enable organizations to adopt strategic management in their management process. The recommendations made will be of immense help to future researchers on strategic management and organizational productivity. Similarly, the study will enlist the importance of strategic management in organizational productivity and profitability, which will serve as a reference for future studies.
This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.
1.8 Scope of Study
The scope of the research is focused on the Effect of Strategic Management in Organizational Performance and Growth.
1.9 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.10 Definition of Terms
Strategic Managers:
These are individuals who bear responsibility for the overall productivity of the organization or for one of its major self-contained divisions.
Strategic Adult:
This is concerned with analyzing and assessing what has been achieved in the past and what the organization is capable of achieving in the future.
Strategic Gap:
This is the difference in the level of productivity called for in the firm’s state objective and the level of productivity that seems likely to result from the continuation of current operations.
Scenarios:
This is a form of educated guesses made by planners. Objective: a statement of what is to be achieved.
Goal:
This is synonymous with objective; a statement of what is to be achieved.
Mission:
This defines the basic purpose or purposes of the organization; usually includes a description of the organization’s basic products and/or services and a definition of its market and/or sources of revenue.
Productivity:
This is an economic measure of efficiency including what is produced relative to resources used to produce it.
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