INFLUENCE OF BUSINESS POLICY ON ORGANIZATION PERFORMANCE
Business policy implementation is an important part of the strategic management process. Implementation includes putting enthusiastically the coherently developed systems. It is the summation of activities in which individuals use different resources to realize objectives of the policy. The capacity to execute techniques effectively is significant to any institution. In spite of the significance of the implementation procedure inside strategic management, this is an area of study frequently dominated by emphasis on the policy formulation process. Numerous institutions confront critical challenges with respect to policy implementation as most strategies flop to deliver better performance for the firm due to poor implementation. The objectives of the study were to establish impacts of key business policy on performance of FBN and to recognize the challenges experienced by FBN in actualizing strategies. The total number of respondents in the study were 5 respondents. The study made use of case study research design. Primary data was collected by use of an interview guide. The collected information was analyzed by use of content analysis. The results showed that there is a positive relationship between business policy and performance at FBN. Different sources of information, for example, investigate articles and secondary organization information sources were additionally utilized. The results indicated that: members from various levels of the bank have unique understanding of the implementation procedure; implementation factors could get to be barricades that undermine the implementation procedure; these obstructions can be overcome if directors are discerning to the bank’s present circumstance. The bank has been able to overcome some of the challenges they faced and are still facing when implementing the strategies they have chosen by undertaking intensive and extensive training of its employees to equip them with the right skills and knowledge that will ensure that they are able to handle the task assigned to them and give the desired results. The bank has also strived to provide the relevant motivation , rewards and foster a good working relationship to ensure that the employees are well motivated hence they will be able very instrumental in the realization of the chosen strategies.
CHAPTER ONE INTRODUCTION
Backgroundof the Study
Strategies are important in organizational operations, but whereas most organizations have good strategies, successful business policy implementation remains a major challenge. Banks have created strategies, the business policy implementation might seem like a walk in the park on the surface yet on the contrary, transforming strategies into actions is far more complex, difficult and challenging and therefore not as straight forward as one would imagine (Allio, 2005).To ensure the success of the policy transferred, it must be translated into well thought out implementable actions. The policy must be converted into guidelines for the daily actions of the organization’s members. For the policy to be successful, there must a oneness between the policy and the firm, in implementing the policy, the managers must guide, monitor and control actions and outcomes and align to change since implementation takes place in a changing environment. According to Cole, (2006), transferred business policy implementation comes across numerous challenges especially in the turbulent environment, which need to be tackled continuously in order attain the long term objectives of the bank.
This study was based on the Agency theory, Resource dependence theory and Resource based view theory. Agency theory refers to relationship between two persons, one of whom is the principal (owner) and the other, an agent (manager). Agency theory explains how best the principal agency relationship can be used for purposes of governing an organization (Bennis, 2007). According to Hrebiniak, (2006), the Resource-based view is grounded in the perspective that a firm’s internal environment, in terms of its resources
(tangible and intangible resources) and capabilities, is more critical to the determination of strategic action than is the external environment. Resource dependency theory is concerned with how the external resources of an organization affect its behavior, it argues that in order to survive, an organization must acquire resources (Pfeffer & Salancik, 1978).This study focused on the effect of business policy implementation by First Bank on its performance.
The initial step in business policy implementation is identifying the critical activities, decisions, and relationships required to accomplish the tasks. There are six critical administrative tasks that guide a manager’s agenda for implementing policy: building an optimal organization structure capable of implementing the policy; ensuring adequate resources to support the process; putting in place internal support systems; coming up with rewards and incentives that are aligned to objectives and policy; moulding the corporate culture to fit the policy; and offering strategic leadership (Barnet, 2007).
Performance is usually specific and unique to an organisation, as depending on the strategic choices an organisation makes determine which performance measures will reflect the concealed performance concept (Steers, 1975).The relationship between implementation and performance is also influenced by which measures the firm has come up with as key indicators; thus the internal measurement systems used will have an effect on organisational performance at the individual and organizational levels (Levenson, Van der Stede, & Cohen, 2006).
Implementing policy is not an easy execise its energy usurping and time consuming. Those who are frequently involved in it concur that it is better to be involved in a policy formulation execise that to put it in motion. Putting policy into motion and getting the organization aligned working together towards a common goal takes a unique set of managerial skills. For policy to be implemented successfully it depends on working through others, organizing, motivating, culture-building and creating strong connection between policy and how the organization approach to issues. Behavior does not all over sudden change just because there is a new policy in place (Thompson & Strickland, 1993).
The main concern in business policy implementation especially banks is how to translate policy into action throught the organisation.This challenge is compounded when one considers a scenario where the strategies are formulated by the top management and have to be implemented by the all cadres of employees.There is always a need for the top management to align it’s interests inorder to overcome the disadvantages that arise from organisational structure.Through enhanced cooperation all levels of staff can create synergies,this entails mechanisms throughout which potentially divergent interests can be managed by the firm to be able to achieve its objecties (Dooms, 1995).
Despite the resources and energies invested in this noble move, the banks have faced challenges in the implementation of strategic plans. Although in practice most banks usually have strategic plans in place there are instances where certain objectives in the plans are not met and other instances where when objectives are met which were not part of the original strategic plans. There is need to establish the challenges that hinder the full implementation of strategic plans and if this may have a positive effect on the performance.
Previous studies done include Serfontein (2010) who researched on the effect of key leadership on the operational system and performance of business institutions in South Africa. He inferred that there was a positive connection between performance and strategic leadership. Kiptugen (2003) likewise led a study on the strategic reactions of Nigeria Commercial Bank to a changing competitive environment. Where he primarily centered around strategies that can be embraced in a competitive domain; the study failed to cover the procedures required in system implementation and performance. Muturi (2005) also considered the strategic responses of the Christian churches in Nigeria to changes in the foreign environment. Where he grounded his study on evangelical churches in Nairobi. This study differs from the current study in terms of the context and concept focused upon, previous studies concluded that there is need to explore business policy implementation on performance in order to arrive at a comparative study. This study therefore sought to establish the effect of business policy implementation on performance of FBN, Nigeria.
The researcher has not come across a study establishing the effects of strategies implementation First Bank on performance.Guided by this knowledge gap, where there is limited both theoretical and empirical review about business policy implementation practices in the banking industry in relation to performance.It is against this background that this study seeks to fill that gap in knowledge by seeking an answer to this question; what are the effects of the implementation of strategies on the performance of First Bank?
This study is guided by the following objectives
- To determine the effects of the business policy on performance of First Bank
- To identify the challenges faced by First Bank in implementing strategies.
significance of study
This study contribute to existing theory for Scholars who intend to carry out further research in this area. The scholars find the research outcome useful as reference material. Therefore, this study go a long way to enrich the existing body of knowledge on strategic management and its implementation in particular.It add to what has already been researched on Agency theory by examining the nature of this relationship in the context of a company’s board and the managers and how this finds bearing on the successful implementation of strategies.
Through studying the Resource Base View in the context of a bank it helps to identify the influence of unique resources and capabilities on the effective implementation of strategies.Under Resource Dependency the it will also bring out the effects of external resources of the effective implementation of strategies and how this eventually affects the performance of the company.
The study was useful to policy makers and the government agencies in finding out the causes of failure or slow implementation of strategic plans and recommend possible solutions. The government can use the research findings in formulating policies on banks. Nigeria bankers’ association would use the study to formulate strategies aimed at advising their members on appropriate practices and policies in the implementation of strategic plans.
This study also contributes to First Bank management as they would be interested to know the factors that are affecting the effective implementation of strategic plans. This study provides a basis for formulating strategies aimed at addressing these challenges to inform the decision making process. Strategic planning requires a large amount of organizations human and other resources to commit the organization to action over an extended period of time. Failure in implementation of the strategic plans risks loss of these resources besides the organization losing the strategic direction.
Scope of study
The intends to establish the impacts of key business policy on performance of FBN and to recognize the challenges experienced by FBN in actualizing strategies. The total number of respondents in the study is 5 respondents how ever content analysis will be done to extensively determine the effect of business policies in the bank fromm 2005 to 2017