THE EFFECTS OF STRATEGIC PLANNING ON ORGANIZATIONAL PERFORMANCE: THE CASE OF OROMIA BANK

Abstract

The purpose of this study is to assess the effects of strategic planning on the performance of banks in Ethiopia, specifically focusing on the operations of Oromia bank. The study utilizes key components of strategic planning, including the organization's vision and mission, SWOT analysis, external environmental analysis, long-term objectives, and the process of generating and selecting strategies. By examining these aspects, the study seeks to gain insights into how strategic planning influences the bank's performance. The study used descriptive and explanatory research designs. Census method was used to allow all target participants to take part in the study. The study focuses on a specific group of employees, namely those working at the Oromia bank head office and the east Finfinnee district strategy management & marketing department. The total number of employees in this target population is 150. Primary data is utilized in this study, gathered with the aid of questionnaires and 110 responses obtained. The data analyzed in descriptive and inferential statistics using IBM SPSS v22. Findings of the study explained on this research through descriptive, correlation and regression analysis. The study revealed that independent variables (organization vision, mission, SWOT analysis, external environment analysis, long term objective and generating and selection of strategy) have positive/direct relationship effect with dependent variable organization performance. The model test conceptual framework of the study and the final model shows same result with regression analysis. All the considered variables have positive correlation with organizational performance in Oromia Bank. The study concludes that strategic planning has a positive effect on organizational performance. The study finally recommends that all factors of the various dimensions should be put into the right perspective to help the general workforce of the bank to understand strategic planning in place to achieve the best organizational performance