PERSPECTIVE OF STRATEGIC MANAGEMENT ON ORGANIZATIONAL PERFORMANCE IN BANKING INDUSTRY

Organizations operate in a dynamic and turbulent marketplace marked by discontinuous change and fierce competition. Companies face significant hurdles as they strive to keep pace with the accelerating speed and increasing intricacy of global shifts across environmental, social, political, technology, and economic landscapes. The resulting complexity of modern business decisions necessitates a formal strategic management approach. Consequently, the success of banks and their capacity to maintain a competitive edge are deeply rooted in how effectively they implement strategic management practices. This paper examined the perspective of strategic management on organizational performance in banking industry. This study relies on a critical review of secondary sources, including journals, industry reports, and case studies selected based on relevance, credibility, and recency. From the perspective of strategic management, organizational performance emerges from a continuous four-stage cycle (environmental scanning, strategy formulation, strategy implementation, and strategy evaluation and control). Environmental scanning guides strategy formulation and improves organizational effectiveness in banking industry; strategy formulation aligns goals, grounds vision with a concrete roadmap, sharpens competitive positioning, proactively addresses risk, enhances customer satisfaction, and increases employees’ turnover in banking sector; strategy implementation ensures financial institutions hit their marks by empowering them to reach their goals through strategic deployment of capital and talent where they generate the greatest impact and monitoring real-time growth, aids operational effectiveness, profitability, and business expansion of banks; and strategy evaluation and control helps banks review their successes, choose the best path forward, and constantly improve their processes. These all contribute to organizational goal alignment and competitive positioning in banking sector. The study concludes that strategic management practices enhance organizational performance of banks. Therefore, the study recommends that banks should define precise, measurable goals during the strategy formulation stage as this is critical for achieving successful organizational performance. Also, banks should undergo routine strategy evaluation in alignment with the key performance indicators of banking sector and set up appropriate monitoring and control systems.