Beyond financials: Examining the impact of customer focus, internal processes, and learning & growth on the sustainable performance of commercial banks—Moderating role of management commitment

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AbstractThis study examines the key factors influencing sustainable performance in commercial banks, focusing on the impact of non‐financial metrics—customer focus, internal processes, and learning and growth—within the Balanced Scorecard framework on the performance of commercial banks in Ethiopia. Additionally, it examines the moderating role of management commitment in this relationship, grounded in organizational learning theory, upper echelons theory, and the balanced scorecard model. The study adopts an explanatory research design, utilizing covariance‐based structural equation modeling and interaction‐term analysis. A multi‐stage sampling technique, followed by systematic random sampling, was employed, with Soper's formula used to determine a sample size of 480 from a total population of 4990. Mahalanobis distance was applied to identify and remove biased responses. The findings reveal that non‐financial metrics—customer focus, internal processes, and learning and growth—positively affect commercial banks' sustainable performance, and management commitment strengthens this effect. Furthermore, the results empirically validate the proposed hypotheses, emphasizing the value of incorporating non‐financial metrics into performance measurement and highlighting the essential role of management commitment in ensuring their success. This research fills a gap in the literature on sustainable performance measurement within the Ethiopian banking sector and provides actionable insights for managers and policymakers.