ABSTRACT
This study is an empirical assessment of the impact of Strategic Management (particularly differentiation strategy) on Organizational Efficiency ,as supported by Glueck (1972) who affirmed that the application of strategic management will ultimately lead to the efficient allocation of scarce resources in an organization.
A total of 124 were administered to employees of First Inland Bank, Intercontinental Bank, Furniture Mart and Viju Industries Ltd. The data were analyzed using Pearsons Product Moment Correlation Coefficient, Chi-Square and Student Tail-Test. The research instrument was self-structured, closed ended and found to be reliable as the result of the split half reliability test gave a positive correlation of 0.51. three hypotheses and six research questions were analyzed. The result from the tested hypotheses proved that strategic management has a strong impact on organizational efficiency, as the level of organizational efficiency of the understudied companies have been positively impacted by the implementation of strategic management.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Until recent times, the attainment of organizational efficiency in a business organization, that is, the capacity of an organization to produce desired results with minimum expenditure of time, money personnel and material, – (Smith and Grimm 1987) depended on the intuition of business owners or managers. Such intuitions were usually based on the past experience or “hunch” of owners or Top managers which could bring about a level of organizational efficiency.
Although some of these intuitive decisions worked for sometime. It has been observed that as the organization increases in size and the business environment starts to experience rapid change as a result of the influence of various external factors. Hence, managers intuition is simply not suitable enough to attain organizational efficiency.
It has therefore become imperative for managers and business owners to utilize a systematic approach towards the attainment of organizational efficiency. There is need to attempt to match the resources of the organization to the rapidly changing environment within which its operates. This systematic approach is what is referred to as STRATEGIC MANAGEMENT.
Strategic management is the process of systematically analyzing various opportunities and threats vis-à-vis organizational strengths and weaknesses, formulating and arriving at strategic choices through critical evaluation of alternatives and implementing them to meet the set objectives of the organization – (Lomash and Mishra 2003). The strategic management process facilitate to optimally position a firm in a given dynamic environment.
This study is being carried out to analyze the relationship between the application of strategic management and the efficiency of a business organization, through the use of empirical and measurable data, collected from organizations which operate in today’s dynamic environment.
1.2 STATEMENT OF RESEARCH PROBLEM
What necessitated this research is the fact that in todays’ dynamic business environment, mere intuition and guesses have become highly inadequate to match the purpose of attaining organizational efficiency. The need for a better systematic and more predictable approach is required. Such approach can only be verified by a study which proves the existence and strength of the relationship between strategic management and organizational efficiency.
1.3 SCOPE OF THE STUDY
This research will examine strategic management focusing on Differentiation strategy in particular as a tool for organizational efficiency. A comparison will be made between organizations which operate in a common business environment who have attained various levels of organizational efficiency through the application of Differentiation strategy i.e., offering unique products or services to that of the competitors. This comparison should reveal if there is variance in the level of organizational efficiency achievable as a result of the degree of differentiation strategy adopted.
1.4 RESEARCH QUESTION
The following questions will be answered at the end of this study:-
i) Is there a strong relationship between strategic management and organizational efficiency?
ii) What effect does Differentiation strategy in particular have on the efficiency of an organization?
iii) Can Differentiation strategy be responsible for market positioning?
iv) What kind of effect does the application of differentiation strategy have on employee performance?
v) Is the application of differentiation strategy a myth or a reality?
vi) Is differentiation strategy an applicable tool for increasing profitability level?
1.5 RESEARCH HYPOTHESIS
HYPOTHESIS 1: The level of organizational efficiency is in direct proportion with the level of implementation of differentiation strategy in an organization.
HYPOTHESIS 2: Organizational efficiency maintains a strong positive relationship with Differentiation strategy in todays dynamic environment.
HYPOTHESIS 3: Differentiation strategy is an applicable tool for increasing profitability level in a business organization.
