IMPACT OF NEW BANKING PRODUCT AND SERVICE DEVELOPMENT PROJECTS ON ORGANIZATIONAL PERFORMANCE; CASE STUDY ON HIBRET BANK S.C

Abstract

The purpose of the study was to examine new banking product and service development projects and its impact on organizational performance in banks with reference to Hibret bank S.C. The study adopted a cross-sectional survey design approach. Explanatory research methods was employed and both qualitative and quantitative data analysis was used the population of the study comprised of (52) fifty-two managers and employees working in the research and development department, IT department, marketing department, and districts managers while 36 responded in this study. The study used both primary and secondary data. Primary data was collected with the aid of a self-administered semi-structured questionnaire. Secondary data was collected by use of desk search techniques from published reports and other relevant documents. The research had seven independent variables (price, ergonomics/ease of use, marketability, manufacturability, quality, functionality, performance of new product service) and one dependent variable that is organizational performance. The results indicated the bank introduced new product/service very often agreeing that introduction of new product/service affected the bank’s performance. In the regression analysis performance of new product and service, price and marketability has high impact on organization performance. It is also found that organizational Strategy and goals, organizational culture, competition with other banks, and the need to sustain performance are factors that affect new product/service development in Hibret bank. From the study findings, it concluded that new product/service development projects affected the banks performance positively. From the findings, the study recommends that banks should consider increasing the level of new product/service development projects as it has a big effect on performance. Organization strategy and goals should always be tailored to promote new product/service development projects. The study also recommended for further research that there is need to replicate the study and to use other variables to assess the Impact of new banking product and service development projects on organizational performance.