ABSTRACT
It is undeniable that every organization is set up with a
purpose. For most banks, one of core motives why they are set up is to be
profitable. Profitability is important because when a bank is profitable, all
of the interests of all the stakeholders are met; shareholders receive
dividends, staff members receive bonuses, taxes are paid to the government,
investors receive interests on their investments and the communities get
amenities through the corporate social responsibility of the bank.
Profitability is achieved when the bank is accountable, transparent, promotes
learning and has competitive advantage. Strategic management techniques are
therefore adopted to guarantee the accomplishments of these profitability
parametres. Strategic management is a process and involves various steps.
Prominent among these is Monitoring and Evaluation (M&E). This thesis set
out to highlight the role played by M&E in the strategic management process
while using The Royal Bank as a case study. Information was sought through a
questionnaire survey administered to 120 customers in 6 branches of The Royal
Bank and 60 staff members in 6 branches of The Royal Bank. It was realized that
M&E is given a lot of importance in The Royal Bank. It is a systems
approach woven around the notion of compliance to outcome measures. To be
effective, M&E deviates from the concept of sole judge in The Royal Bank.
It draws expertise from customers and staff members by promoting participatory
approaches in decision making. The main challenge of M&E in The Royal Bank
is that staff members feel they are subjects of evaluation rather than users.
They feel their contributions do not play a role in decision making. To solve
this challenge, it is recommended that management should allow certain basic
decisions be made at the branch levels.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The Monitoring and Evaluation (M&E) field of study has
gained ascendency to its present status where there is now an impressive amount
of literature and a community of professionals known as “evaluators”. This
prominence is as a result of the fact that M&E is an integral aspect of strategic
management. An organization must demonstrate its ability to be successful to be
able to attract investors. Strategic management techniques when adopted
guarantees success. It is “... the process by which the guiding members of an
organization envision its future and develop the necessary procedures and
operations to achieve that future…” (Goodstein et al, 1992 p.11). The banking
industry is one of the prominent areas where strategic management techniques
have been predominantly adopted. With increased competition among banks,
profitability has not been easy to come by. Banks have therefore resort to
strategic management techniques to guarantee success and grant competitive
advantage.
In addition, strategic management techniques are being
adopted because of accountability issues. The need to be accountable has become
a major area of interest during these last few years (Naidoo, 2009 p.12).
Public or private banks are increasingly under pressure to demonstrate their
effectiveness and document their findings in order to continue to obtain
credibility. Accountability has become a management technique to gain
competitive advantage. Melinda Tuan described it as the “culture of measuring”
(Tuan, 2004 p.23), Joanne Carman also described it as the “accountability movement”
(Carman 2009b p.25) and Carol Fitz-Gibbons referred to it as the “age of
indicators” (Fitz-Gibbons 2002). M&E as an aspect of strategic management promotes accountability.
Therefore, M&E is in line with bank’s evidence-based policy and their
strategic management. It is through M&E that banks display their
performance results thereby being accountable. The most accountable bank is
more unless the most credible bank and M&E is their tool. Also, the current
focus on the use of M&E to promote transparency and accountability is
needed to instil a performance culture that will ensure growth.
As a result of the competition, one of the key questions for
banks is “What works?” To make deliverables more effective, different
techniques are developed. Therefore, the question of “what works?” is no longer
enough. In the last years, strategic management techniques have been adopted to
adjust the question “what works” to the specific circumstance. What is more
applicable is the question of “what works for whom in what circumstances”
(Pawson & Tilley, 1997 p.41). M&E as a component of strategic
management assesses every step of the way to make deliverables more efficient.
Through M&E, steps are revised over and over till they yield the specific
results needed. The needs of bank customers are different. It is through
M&E that banks identify the products and services that best suit customers,
M&E has therefore become a necessity for all banks but unique to every one
of them in terms of how it is carried out.
As a crucial component of strategic management, this thesis
seeks to highlight these roles played by M&E in the strategic management
process. The Royal Bank is used as a case study to make this study more
practical. The Royal Bank is a fully owned Ghanaian bank established in 2012.
It was the first bank in Ghana to record profits in its first year of
operations. The bank has been awarded severally on both local and international
platforms.
Notable among the awards is the back to back award of best
bank in growth won by The Royal Bank in 2013 and 2014 indicating that the
strategic management policy of the bank is well equipped and functional thus
the results. The Royal Bank is therefore the best case study that could be used
to practicalize the important role M&E plays in promoting strategic
management. In the Royal Bank’s governance practices, it has adopted its own
corporate governance guidelines.
This study is also a source of insight into how the global
practice of M&E has been adopted, structured and used in pursuit of global
standards of effective management practices.
1.2 Problem Statement
It is only when the bank is profitable that the interests of
all stakeholders are met; shareholders receive dividends, staff members receive
bonuses, investors receive dividends on their investments, taxes are paid to
the government and amenities are provided to the communities through the
corporate social responsibility of the bank. However, profitability is achieved
when the bank is accountable, transparent, promotes learning and has
competitive advantage over its rivals. In a bid to accomplish these
profitability parametres, strategic management is adopted to guarantee the
achievement of success. It is a “. . . management . . . system . . . that links strategic planning
and decision making with the dayto-day business of operational management”
(Gluck et al, 1982 p.2). In modern times, it has therefore become imperative
for any institution to adopt strategic management techniques.
However, the challenge with the adoption of strategic
management is that most organizations equate strategic planning to strategic
management. Goodstein et al (1992 p.17) defined strategic planning as “…the
process by which the guiding members of an organization envision its future and
develop the necessary procedures and operations to achieve that future…”
Strategic planning is only one step in the strategic management process.
Monitoring and Evaluation (M&E) is another major step in the strategic
management process. Monitoring and Evaluation in the strategic management
process is begun before the strategic plans are designed. It is used when the
strategic plans are deployed and used when results are achieved to gauge
performance. M&E has a predictive and accountability tendency. Without it,
success is not certain. It is therefore a very integral part of strategic
management. It is the identification, development, communication, collection,
and assessment of selected outcome measures that are directly linked to the
organization’s performance of its mission and attainment of its vision (Wells,
1996, p77). This thesis sets out to highlight these roles played by Monitoring
and Evaluation in the strategic management process whiles using The Royal Bank
as a case study.
1.3 Objectives of the Study
This study looks at the role of M&E in promoting
strategic management in the Royal Bank. It is guided by the theories of M&E
and strategic management. Specifically, the research seeks:
To assess the nature of M&E in The Royal Bank.
To examine the effectiveness of M&E in The Royal Bank in
promoting strategic management.
To examine the challenges of M&E in The Royal Bank and
how it affects strategic management.
1.4 Research Questions
The following are the research questions that are addressed:
What is the nature of M&E in The Royal Bank?
How effective is M&E in The Royal Bank in promoting
strategic management?
What are the challenges of M&E in The Royal Bank and how
does it affect strategic management?
1.5 Significance of the Study
M&E plays a very important role in the strategic
management process. It has a presence before and during the strategic planning
stage. It is similarly present in both the implementation and deployment stages
of the strategic management process. However, the field of M&E has not had
the attention it deserves in the management literature. A lot of institutions
are struggling for success because it is difficult for them to be accountable,
transparent and promote organizational learning. M&E guarantees success
because of its predictive tendency. This study therefore highlights the
important role played by M&E in the strategic management process whiles
using The Royal Bank as a case study. The study brings to fore the challenges
of M&E in the strategic management process that makes it difficult for most
organizations to fully adopt.
This study is therefore a source of insight to The Royal Bank
and other organizations as a whole on the important role M&E plays in the
strategic management process. The challenges of M&E in The Royal Bank identified in this
study will give The Royal Bank the direction and insight to channel their
attention and effort in making M&E effective thus promoting strategic
management. The lessons learned can be of much benefit to other banks and
institutions on the best ways approach M&E if strategic management is to be
effective.
1.6 Methodology of the Study
Customers as well as staff members of The Royal Bank, formed
the population of the study. The study employed primary data as well as
secondary data. Secondary data was sought from different published sources and
the documents of The Royal Bank. Primary data was collected by structured
survey. 180 questionnaires were collected using convenient sampling techniques.
Both primary and secondary data were used for the study whereas the data
analysis was done using Microsoft Excel and SPSS.
1.7 Scope of the Study
The study focuses on two important fields of study;
monitoring and evaluation and strategic management. They are linked by the
mission of the organization. A very important question is whether M&E in
The Royal Bank is carried out in a way that optimizes strategic management.
The idea advanced is that M&E plays an important role in
promoting the core tenets of strategic management. M&E at both the
operational and planning level of institutions resonates the concepts of the
mission of the organization. At any level of management, M&E plays a
critical role in supporting the adoption of results oriented approaches.
This study takes a look at how M&E influences the
achievement of the goals of the bank and much more critically how M&E
influences the operations of the bank rated against the various standards of
strategic management and service delivery. The Royal Bank has a very
articulated policy focus related to the promotion of strategic management. As a
typical universal bank, The Royal Bank implements policies that are in line
with the directives of the Bank of Ghana, and if the various departments of the
Bank are well managed and accountable, the goals of the bank will be achieved.
M&E plays the role of keeping the various implementing departments of the
bank on course towards the achievement of the targets of the bank.
1.8 Limitations of the Study
The inability of the researcher to get funding to support the
study resulted in the limitation of the sample size. The findings of the
research could have been further enhanced if there was support to include more
customers and staff members in the data acquisition. The availability of
funding could have made the researcher increase his sample size by visiting
more branches to administer questionnaires.
1.9 Organization of the Study
This research consists of five chapters. Chapter One provides
the general background to the study and states the problem that is being
researched. It also contains the objectives and scope of the. Chapter Two is a
presentation of related literature to the study. It focuses on the manner in
which the theories of M&E have been incorporated in the practice of
strategic management. Chapter Three is a presentation of the methods that is
used to conduct the research. Chapter four is a presentation and
analysis of data collected and would be illustrated with the use of appropriate
Tables and Figures. Chapter five, the final chapter, presents the findings,
conclusions and recommendations of the study.
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