Abstract
Strategic management was first originated in the Military and adopted to the business sector as important management tool in response to the unpredictable, turbulent, and chaotic world. It is the process of determining what an organization intends to be in the future and how it will get there. It is a tool which helps to define the best future for the organization and the best path to reach that destination. The overall objective of the study is to examine the Effect of Strategic Management Practices on the institutional Performance; the case of Dedebit credit and saving institution in Eastern Tigray. This study the Effect of Strategic Management Practices among 128 sampled Dedebit credit and saving institution out of 346-targeted population at eastern Tigray. Stratified sampling was employed to select the respondents in this study. The study utilized both quantitative and qualitative approaches. Data was collected through questionnaires and documents of the organization also SPSS was used to analyze data. Data analysis was carried out using descriptive statistics and multi regression model. The descriptive part presents the stages of effect of strategic management Dedebit credit and saving institution using graphs and table based on the position held and experience. The empirical study shows strategic management implementation was found to be of more challenging than the designing process. Most respondents confirmed their capability of translating the strategic into action plans also self-initiated to prepare a comprehensive strategic plan rather than considering as an imposition of their donors. Findings showed that most DECSI try to manage strategically by aligning Initiatives with Strategy, engaging staff fully in strategy implementation, keeping staff fully informed about corporate strategic direction, monitoring strategy and implementation in order to adapt it where necessary to meet the challenges and realities of the times and structuring the organization to be effective in its strategy implementation. The study also showed that all the strategic management practices had significant positive effects on organization performance. Furthermore, the study showed that the most ensnaring pitfall of strategic management is the inability of organizations to translate strategy into a corporate purpose. This was followed by short term planning, failure to create accountability for results, inability to foster belief in the strategy, ignoring external trends, overconfidence based on existing success and failure to respond to structural changes in the market. Finally, the study showed that strategic management practices have direct positive relationship with corporate performance. Based on the findings, the study recommended that managements of savings and loans companies factor into their strategic management decisions, the marketing environment and the prevailing macro conditions in order to come out with an effective strategic plan that would have positive impact on institutional performance. Keywords: strategic management practices, performance, DECSI, Eastern Zone.
Highlights
Strategy is the link between the organization and the external environment
The findings suggest a significant association between the diffusion of these relatively new strategic management tools and organizational performance
This study relies on strategic management practices and organizational performance, indicators of success
Summary
Strategy is the link between the organization and the external environment. Strategy is mirrored in the pattern of moves and approaches devised by management to produce the desired performance. The crafting of a strategy represents a managerial commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations and improving the company’s financial and market performance. A company’s strategy is all about how management intends to grow the business, how it will build loyal clientele, how the company will outcompete rivals, how each functional piece of the business which include research and development, supply chain activities, production, sales and marketing, distribution, finance and human resources will be operated and how performance will be boosted. The study showed that out of the 128 sampled respondents, 75% were expert level management of their institution, and 27% were Middle level management and the remaining 14.5% were Top level management s of their institution. Age distributions of respondents showed that 52% of sampled respondents were aged between 26-35 years, 40% were aged between the age brackets of 35-45 years and the remaining 8% were aged between 18-25 years
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