ASSESSMENT OF STRATEGIC MANAGEMENT PRACTICES; THE CASE OF ETHIOPIAN INSURANCE CORPORATION

Abstract

The most critical challenge facing most organizations today is to cope and deal with a saturated market where there are many competitors and empowered and informed customers. Insurance companies besides the dynamism are highly vulnerable to challenges with high failure rate as they bear the risks inherent in their operation and the risks transferred to them by way of insurance. Strategic management emerged as an important management tool in or to cope up with the dynamism and retain competitive advantage. Strategic management is a series of decisions taken to determine long term objectives and includes the phases of environmental scanning, strategy formulation, strategy implementation and strategy monitoring and evaluation. The purpose of this study is to describe the strategic management practices of EIC. The study compares these practices with the widely accepted theoretical concepts in the field. The research utilized both qualitative and quantitative data. Qualitative data was collected via interview from two members of the organization intensively involved in the strategic management. Quantitative data was collected based on the questionnaires distributed to the management and employees. Secondary sources of data including strategic plans and budget preparation guidelines were also used. Under the section dealing with analysis and interpretation of data, the four phases of the strategic management process in EIC are assessed as per the review of literature under chapter two. The findings show the strong aspects of the strategic management process and also loopholes in the process. Based on the findings of the study recommendations are also forwarded. Future research could include an in-depth and wider study of the most appropriate strategy practices by showing the link between the four phases of the strategic management process.