THE EFFECT OF STRATEGIC MANAGEMENT ON ORGANIZATIONAL PRODUCTIVITY: CASE STUDY OF MOBILE TELEPHONE NETWORK (MTN) BUEA, CAMEROON
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This study was carried out with the aim of investigating the effect of strategic management process on organizational Productivity of MTN Company, Buea Cameroon. Specifically, the study sought to analyse the effect of strategy formulation, strategy implementation, and strategy evaluation on organizational performance. The target population was 292 registered employees of MTN Buea Branch from which 146 were randomly selected from the different departments.. Data was gathered by means of a structured questionnaire.. After data collection, the study conducted descriptive and inferential analysis, where descriptive analysis entailed, means, standard deviations and frequencies. Inferential analysis included correlation analysis and One-way Analysis of Variance (ANOVA)
The study found that organizational Productivity was positively and significantly correlated with strategy formulation Organizational Productivity was positively and significantly correlated with strategy implementation.. Organizational Productivity had positive and significant correlation with strategy evaluation. The study concluded that strategic management process, especially strategy formulation positively and substantially influenced organizational Productivity .The study recommended that in order to achieve the organizational vision and consequently enhance the Productivity of MTN company and other securities exchanges should put appropriate measures that ensure effective strategy formulation.
Keywords: strategic formulation, strategic implementation, strategic evaluation, organisational performance
Due to competition over the world today, companies have tried to employ the use of strategic management practices in order to survive and remain steady in the market place (Olsen, Ching Yick Tze and West, 1998). The strategic management practices are the results of managers’ ideas to identify the forces that determine the changes allowing them to understand the opportunities from within and outside their business environment. The ultimate goal of managers is to obtain the best results with minimum effort and lowest investments.
All these and many more effective results can be accomplished only if they can choose the best management strategy practices and thus obtain the competitive advantage.
The Mobile Telecommunication sector, like any other sector of the economy requires continuous policy making and review of existing processes for proper results and delivery which in turn improves on the Productivity of the yearly budget and GDP of the country.
The strategic thinking and the strategic management are seen as the most important activities of any organization (Evans, Campbell and Stone house, 2006). The way in which these activities are performed can explain the success or failure of an organization on the long run.
Most business managers, owners and leaders are eager to develop and implement the best strategy that will sustain an increased level of Productivity for their organizations. The main aim of strategic management practice is to analyse company’s internal and external environment/ variables and to offer a solution for improving the organizations financial results, thus, one can say that strategic management is important for all companies.
1.2 Background to the Study
In today’s turbulent business environment, managers increasingly need reliable navigational tools to achieve competitive advantage. Many academics and practitioners consider strategic management to be such a tool, that today’s managers have to think strategically about their company’s position and about the impact of changing business environment. Strategic management, according to Kotler (2012), is defined as the managerial process of developing and maintaining a viable fit between organization objective, skills resources and its changing market opportunities. In any organization, strategic management occurs in two phases which include the decision on the products to produce and or the services to render. Also, it includes deciding on the marketing and or the manufacturing strategy to follow in getting the intended product or service to the proper user.
Strategic management decisions will have long term impact on the organization. Similarly, Mintzberg (2011) argued that strategic management attempts to combine short-term planning and long-term planning. Organizations conducting Strategic management typically commit themselves to a formal process in which a group of planners articulate a mission statement, set goals and objectives, audits the organization for internal strengths and weaknesses, assesses the external environment for opportunities and threats, evaluates strategic options, and then select and operationalize an organizational strategy. The basic aim of strategic management is to link daily organizational decisions with a vision of where the organization wants to be at some point in future, usually five years. Hence, strategic management is not a single panacea but is instead an adaptable set of concepts, procedures, tools and practices intended to assist organizations determine where they are, what they are doing, how to do it and why. Porter (2010) argued that strategic management is the process of devising a plan of both offensive and defensive action intended to maintain and build competitive advantage over the competitors through strategic and organizational innovation.
The three issues that Strategic management should address include; what to do, to identify the customers and how to do better than the competitors. Blackerby Associates (2010), said that strategic management is a continuous and systematic process where people make decisions about intended future outcomes, how outcomes are to be accomplished, and how success is to be measured. McDonald (2013) further developed a frame work arguing that strategic management process delivers a set of defined initiatives (projects) that achieve a desired set of business goals. Renger and Titcomb (2012), were of the opinion that strategic management is an organizational process of defining its strategy or direction and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenue through which it can pursue in particular its course of action. In addition, Amit and Zott (2010) averred that strategic management spells out the basic mission of the organization and decides the resources that will be used to accomplish the stated mission. It is the master plan of the organization from where all the departments in an organization derive their functions and directions.
Organizational productivity and profitability is concerned with how an organization has fared in its quest to achieve competitive advantage position and expands its market share relative to their Competitors in the market place. Notable international businesses and multinational corporations (MNCs) across the globe, have for a long period of time achieved and sustained competitive advantage through consistently profitable business operation. Therefore, a business that is more profitable than its rivals by exploiting some form of strategic advantage is believed to be performing well. The source of the advantage can be something the business does that is distinctive and difficult to replicate, also known as a core competency (Colotla, Chrisman and Carroll, 2013). A firm’s core competencies are things that a firm can do well and that meet the following three conditions specified by Prahalad and Hamel (2010) which are, first, it provides customer benefits; second, it is hard for competitors to imitate; and third, it can be leveraged widely unto many products and market.
Interestingly, much of our understanding of the notion of successful organizational productivity and profitability has been drawn from the experience of Western and multinational organizations (Peng and Tan, 2011). By and large organizational productivity is examined as resulting from and being associated with a long list of contributing factors. Such as operational efficiencies, levels of diversification, types of diversification, organizational structures, top management team composition and style, human resource management, manipulation of the political and/or social influences intruding upon the market, conformity to various interpretations of socially responsible behaviours, international or cross-cultural activities of expansion and adaptation, and various other organizational and/or industry level phenomena (Flint and Van Fleet, 2012; King, 2014).
1.3 Problem Statement
In today’s world, there is a rapid change in the business environment such that the product-market competition is ever increasing among industries, information technology improving in various industries as the day goes by in a way that firms use internet facilities and social network to advertise and market their products and services. To compete successfully in this present competitive business environment, firms continually need to make some strategies and take some actions by improving product quality and productivity, reducing product cost, promoting product and process innovations, and improving product speed to the market and customers’ goodwill. Firms therefore need to strive to be at par with the global change, achieving competitive advantage position and enhancing Productivity relative to their competitors (Muogbo, 2013).
Strategy is a detailed plan for a business in achieving success. Since business is a high-stakes game, a poorly planned and executed strategic move could result in loss of millions of dollars, thousands of jobs, or even bankruptcy of business (Dauda et al., 2010).
This calls for strategic management in order to develop an effective strategy. Thus, strategic management comprises the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a firm’s objectives. Strategic management is the process of making decision, planning, coordinating and taking some actions by the top managers of a company in order to achieve set goals and objectives. Decisions are of little use unless they are acted upon. Firms must take the necessary actions to implement their strategies. This requires top managers to allocate the necessary resources and to design the organization to bring the intended strategies to reality (Dess et al., 2005). Because it involves long-term, future-oriented, complex decision making and requires considerable resources, top-management participation is crucial.
Wheelen and Hunger (2007) articulated that initially strategic management was of most use to large firms operating in multiple industries. Increasing risks of error, costly mistakes, and even economic ruin now forced today’s professional managers in all organisations to take strategic management seriously in order to keep their firms competitive in an increasingly volatile environment.
The study of strategic management has drawn so much attention among business practitioners and academic researchers in the last two decades as globalization came fully into limelight. As more industries become global, strategic management now becomes an increasingly important tool to keep track of international developments and position the firm for long term competitive advantage. In developed countries as well as in developing ones, much has been written on strategic management in form of books. However, Cameroon in particular, there are few empirical studies conducted to investigate the relationship between strategic management and firm performance. This necessitated the study.
In Cameroon, most organizations attribute their failure to lack of funds, market situation and product unacceptability. Meanwhile, Ikemefuna (2010), observed that lack of vision; mission, and improper planning are the principal causes of business failure. However, Mintzberg (2011) argued that strategic planning is an involved, intricate and complex process that takes an organization into the uncharted territory. It does not provide a ready to use prescription for success; instead, it takes the organization through a journey and helps develop a framework and context within which the answers will emerge.
The main problem of this study is therefore concerned with issues of haphazard planning; issues of not attaching adequate importance to business environment; and issue of engaging unqualified managers that can undertake effective strategic management in order to meet up with the productivity and profitability of Business organisations in Cameroon especially that of the Mobile Telecommunication Networks. It is therefore hoped that the evidence from this study would serve as important quantitative information into the cauldron of business policy and also add to the existing body of empirical literature for a developing nation like Cameroon.
1.4 Research Questions
1.4.1 Main Research Question
What is the effect of strategic management on organisational Productivity of MTN Company?
1.4.2 Specific Research Questions
The following specific research questions would be asked in the course of this study:
- What is the effect of strategic formulation on the organisational Productivity of MTN Company?
- What is the effect of strategic implementation on the organisational Productivity of MTN Company?
- What is the effect of strategic evaluation on the organisational Productivity of MTN Company?