Impact of strategic planning on the performance of commercial banks: the case of public commercial banks in Eastern Hararghe, Ethiopia

Figures & data

Figure 1. Conceptual framework. Source: Developed from the evidence of researchers review and (Yegzaw, 2022, Rahman 2019).

Table 1. Target population, sample size, and return rate and validity of the questionnaires.

S. No	Branch commercial banks’ name	No. of distributed			No. of returned			No. of valid question
		Managerial	Non-managerial	Total sample	Managerial	Non-managerial	Total sample	Managerial	Non-managerial	Total sample	% Of valid ques
1	Harar Branch	3	20	23	3	18	21	3	17	95.2	95.2
2	Jegol Branch	3	9	12	3	8	11	3	6	81.8	81.8
3	Abobeker Branch	2	7	9	2	6	8	2	6	100.0	100.0
4	Gelmeshira Branch	1	2	3	1	2	3	1	2	100.0	100.0
5	Hakim Branch	2	2	4	2	2	4	2	2	100.0	100.0
6	Jenael Branch	2	2	4	2	2	4	2	2	100.0	100.0
7	Abadir Branch	2	3	5	2	3	5	2	2	80.0	80.0
8	Helal Branch	1	2	3	1	2	3	1	2	100.0	100.0
9	Shenkor Branch	3	6	9	3	6	9	3	5	88.9	88.9
10	Haromaya Branch	3	5	8	3	5	8	3	4	87.5	87.5
11	Lukuman Branch	1	2	3	1	2	3	1	2	100.0	100.0
12	Finklie Branch	3	4	7	3	4	7	3	4	100.0	100.0
Total		26	64	90	26	60	86	26	54	80	93.0

Table 2. Reliability test for strategic perspectives and performance.

No	Variables	Cronbach’s alpha	Number of items
1	ES/OP	0.610	11
2	SF/OP	0.718	11
3	SI/OP	0.670	11
4	SE/OP	0.655	10
	Overall reliability	0.829	25

Source: Survey result (2022).

Table 3. Respondents’ perception of banks’ performance across strategic planning perspectives.

Strategic planning perspectives/Indicator variables and items	Symbol	Mean	SD
I. Environmental scanning	ES	3.80	0.565
The bank scanned its external influencing factors timely	ES1	3.68	0.985
The bank had mechanisms to scan its internal and external environmental factors	ES2	4.13	0.905
Environmental scanning minimizes unpredicted occurrences and helps manage associated risks	ES3	3.76	0.809
The firm analyzed its internal influencing factors timely	ES4	3.91	0.885
The firm had formal mechanisms to analyze its existing strategies, customers, and competitors	ES5	3.43	0.868
II. Strategy formulation	SF	3.96	0.644
The bank’s vision and mission statements and long-term objectives formality and attainability status	SF1	4.04	0.887
The bank Employees involved in the formulation of short-term operational objectives	SF2	3.96	0.847
The bank’s strategic plan is established by identifying & formulating its influencing factors wisely	SF3	4.15	0.812
Bank managers working towards goal achievement by using strategy formulation guiding alternatives	SF4	3.98	0.898
All the concerned bodies of the bank are aware of its goal.	SF5	3.92	0.831
III. Strategy implementation	SI	3.36	0.765
The bank executed its strategy its resources and communication with the staff members	SI1	3.31	0.975
The firm designs motivational and reward systems by communicating with its employees properly	SI2	3.38	0.960
The bank operated its strategy by basing its objectives and expected performance	SI3	3.45	0.884
The bank structurally facilitated the execution process by matching its strategy with its responsibilities	SI4	3.39	0.936
The firm puts policies into action via the development of programs, budgets, and procedures.	SI5	3.29	0.987
IV. Strategy evaluation	SE	3.78	0.746
The organization measured its actual performance timely	SE1	3.91	0.896
The business firm compared its performance with its objectives or standards	SE2	3.51	0.996
The firm recognized the difference and identified the reason for the deviation	SE3	3.81	0.915
The bank maintained alternative strategies for potential threats /Taking corrective actions	SE4	3.86	0.903
Overall strategic planning impacts performance	OP	3.72	0.460

Source: Survey result (2022).

Table 4. Descriptive analysis for constructed variables and organizational performance.

Strategic performance indicator variables and items	Mean	SD
Employees are committed and highly motivated by the bank’s delightful services	3.49	0.894
The bank’s operational efficiency, really improving its financial performance competency	3.71	0.892
Employees/Customers’ want/expectation is fulfilled by the bank’s quality services	3.44	0.898
Customers are satisfied with the services offered by the bank.	3.84	0.848
The bank’s market share (deposits) is continuously increasing	3.67	0.896
The profitability of commercial banks is continuously increasing	3.88	0.886
Performance of Banks	3.68	0.464

Source: Survey result (2022).

Table 5. Correlation matrix.

Variables	OP	ES	SF	SI	SE
OP	1
ES	0.665**	1
SF	0.742**	0.461**	1
SI	0.454**	0.158	0.307**	1
SE	0.631**	0.408**	0.435**	0.331**	1

Source: Survey result (2022).**Correlation is significant at the 0.01 level (2-tailed). b. Listwise N = 80

Table 6. Co-linearity statistics.

Variable	VIF	Tolerance (1/VIF)
SF	1.37	0.732601
SE	1.46	0.687285
ES	1.17	0.856164
SI	1.40	0.714796
Mean VIF	1.35

Source: Survey result (2022).

Table 7. Breusch-Pagan/Cook-Weisberg test for heteroskedasticity.

Breusch-Pagan/Cook-Weisberg test for heteroskedasticity
Ho: Constant variance
Variables: fitted values of OP
chi2(1) = 3.33
Prob > chi^2 = 0.0682

Source: Survey result (2022).

Table 8. Goodness of fit/model fitness summary.

Model	Coefficient
R	0.883
R square	0.779
Adjusted R square	0.767
Std. error of the estimate	0.204
Significant.	0.000

Predictors: (Constant), ES, SF, SI, SE.

Dependent variable: OP.

Source: SPSS Regression Output, 2022.

Table 9. Relation between coefficient of strategic planning perspectives & bank’s performance.

Model	Unstandardized coefficients		Standardized coefficients	t	Sig
	B	Std. error	Beta
(Constant)	0.732	0.185		3.947	0.000
ES	0.255	0.047	0.341	5.382	0.000
SF	0.274	0.043	0.419	6.396	0.000
SI	0.105	0.032	0.190	3.231	0.002
SE	0.139	0.036	0.246	3.838	0.000

Dependent variable: strategic organization performance.

Source: SPSS Regression output, 2022.

Yegzaw, D. A. (2022). A framework for effective strategy implementation: A resource-capability approach: The case of commercial banks in Ethiopia [Doctoral dissertation]. University of South Africa.

 Google Scholar

Rahman, A. A. A. A. (2019). The impact of strategic planning on enhancing the strategic performance of banks: Evidence from Bahrain. Banks and Bank Systems, 14(2), 140.

 Google Scholar

Data availability statement

Available on request.