Impact of corporate strategy on financial performance of financial institutions listed on the nigeria stock exchange

Thesis Overview

<p> <b></b></p><p><b><b>INTRODUCTION</b></b></p><p><b><b></b></b></p><b><b><p><b>1.1 &nbsp; &nbsp; <br></b><b>Background<br>of the study</b></p><p><b></b></p><b><p>Corporate strategy is part<br>of managerial economics that described the scope and direction of an<br>organization over a long period of time. Corporate strategy is the process of<br>the overall scope and direction of a corporation and the way in which its<br>various business operations work to achieve their goals. This project is<br>concerned about the responsibility among different participants in different<br>organization such as the board, managers, shareholders, and other stakeholder<br>and spells out the rules and procedures for making decisions on corporate<br>affairs. Financial performance is an important concept that relates to the way<br>and manner in which human, material and financial resources available to an<br>organization and is judiciously applied to achieve the overall corporate<br>objectives (Young, 2003).Since the 1970, a growing number of studies have been<br>going on linking corporate polices and performance with governance. The reason<br>being that, allegations were not tested using the corporate governance<br>variables and performance indices. Corporate scandals around the world in<br>recent years contributed to raising awareness among managers, investors and<br>regulators and in many countries to produce quantitative measures on<br>governance, and estimate their impact on the decision-making process of<br>firms.Hence, financial scandals around the world and the recent collapse of<br>major corporate institutions in the USA, South East Asia, European and Nigeria<br>such as Adelphia, Enron, world’s corn, commerce banks and recently shaken<br>investor’s confidence in the capital markets and the efficiency or existing<br>corporate strategy practices in promoting transparency and accountability. This<br>has revealed the need for practice of good corporate strategy and governance.</p><p><b>1.2<br>STATEMENT OF THE PROBLEM</b></p><p><b></b></p><b><p>Strictly<br>speaking, corporate governance rest with the board which is expected to exhibit<br>ethics, integrity and probity in ensuring that corporate affairs are in line<br>with the corporate objectives. But what appears to be the thing is that<br>financial institutions in developing countries are characterized by<br>instability, tenure of office, ineptitude, share incompetence; inter personal<br>disagreement and hostilities within the board which often lead to polarization<br>of rank and file of staff (Kyereboad, 2007). More so, board members and top<br>management staff often take advantage of this scenario and engage in arbitrage<br>opportunities and rent seeking activities rather than planning for high<br>corporate performance and survival strategies all of which are systematically involved<br>in negative effect on the organization.<b></b></p><b><p><b></b></p><b><p><b>1.3 OBJECTIVE OF THE STUDY</b></p><p><b></b></p><b><p>The objective of the study is to<br>examine corporate strategy and financial performance of financial institutions<br>listed on the Nigerian stock exchange and the specific objective includes:</p><ul><li>To examine the significant<br>relationship between corporate strategy and the financial performance.</li><li>To ascertain the significant<br>relationship between corporate strategy and financial institution.</li><li>To determine the significant<br>relationship between audit committee and investors.</li></ul><p><strong>1.4<br>STATEMENT OF HYPOTHESES</strong></p><p><strong>Hypothesis<br>One</strong></p><p><strong>HO: &nbsp; </strong>There<br>is no significant relationship between corporate strategy and the financial<br>performance.</p><p><strong>HI: &nbsp; &nbsp;</strong>There<br>is significant relationship between corporate strategy and financial performance.</p><p><strong>Hypothesis<br>Two</strong></p><p><strong>HO:</strong>&nbsp; <br>There is no significant relationship exists between corporate strategy and<br>financial institution.</p><p><strong>HI:</strong>&nbsp; There<br>is significant relationship corporate strategy and financial institution.</p><p><strong>Hypothesis<br>Three</strong></p><p><strong>HO: &nbsp; </strong>There<br>is no significant relationship between audit committee and investors.</p><p><strong>HI:</strong>&nbsp; &nbsp;There<br>is significant relationship between audit committee and investors.</p><p><b>1.5<br>SIGNIFICANCE OF THE STUDY</b></p><p><b></b></p><b><p>Companies draw up financial<br>plan to efficiently direct the change of an economy. The study is thus<br>significant in the following ways;</p><p><strong>Firm:</strong>&nbsp;This<br>also help firms set themselves up for making sure corporate strategists seize<br>market opportunities that emerge in the short and long terms without a sound,<br>focused financial strategy, the financial institution may lack the occupational<br>framework needed to motivate employees and improve their productivity<br>importance.</p><p><strong>Security<br>Exchange: </strong>Securities exchange players keep across on<br>company’s financial performance and corporate strategy takes an in-depth look<br>at how accounting manager prepares financial statement, making sure the report<br>adhere to regulatory guidelines in the Nigeria stock exchange</p><p><b>1.6<br>SCOPE AND LIMITATION OF THE STUDY</b></p><p><b></b></p><b><p>This scope<br>of this study is to cover the sufficient evidence of relationship between<br>corporate strategy and financial performance as a corner stone of an effective<br>corporate strategy system in the Nigerian stock exchange. They go hand in hand<br>although both concepts are distinct. The corporate strategy affect how senior<br>leadership raise operating funds and spends corporate cash, decision that have<br>ultimate impacts of the company’s profitability. Benin City, Edo State was used<br>as the geographical location, using a time frame of 5 years (2009 – 2013).<br>However, a sample size of 72 was used to yield effective result.Gary<br>(2002) coined the term strategy convergence to explain the limitation of the<br>strategic being used by rivals in greatly differing circumstances, he lamented<br>that successful strategies are limited by firms that do not understand the<br>strategy for the specific of each situation. But in the world where strategies<br>must be implemented, the factors are interdependent means that are likely to<br>determine end as end are to determine means. These factors are:</p><ul><li>Time frame as a result of the<br>very short period, it has a difficult task in combining activities with<br>going to the field to collect materials for the research work.</li><li>Smallness in sample size.</li><li>Inability to get a complete<br>random sampling.</li><li>Respondents might not disclose<br>true fact about their organization.</li><li>Finally was dearth of materials<br>getting up to date, (i.e. materials for the research were a very big task.</li></ul><p><b>1.7 DEFINITION OF TERMS &nbsp; </b></p><p><b></b></p><b><p><strong>1. &nbsp; &nbsp;<br>Corporate Strategy: </strong>this is the overall scope<br>and direction of a corporation and the way in which its various business<br>operations work together to achieves particular goals.</p><p><strong>2. &nbsp; &nbsp;<br>Strategy: </strong>This is the direction and scope of an<br>organization over the long term which achieves advantage for the organization<br>through its configuration of resource within a challenging environment, to meet<br>the needs of markets and to fulfill stakeholder expectations.</p><p><strong>3. &nbsp; &nbsp;<br>Financial Performance: </strong>This is an important<br>concept that relates to the way and manner in which financial resources<br>available to an organization are judiciously used to achieve the overall<br>corporate objective of an organization, in keeps the organization in business<br>and creates a greater prospect for future opportunities.</p><p><strong>4. &nbsp; &nbsp;<br>Corporate Governance: </strong>This is the process<br>affected by a set of legislative, regulatory, legal, market mechanisms, listing<br>standard, best practices and effort of all corporate participants including<br>auditors and financial advisors which create a system of checks and balance with<br>the goals of creating and enhancing and sustainable value while protecting the<br>interest of external environment.</p><p><b>1.8 ORGANIZATION OF THE STUDY</b></p><p><b></b></p><b><p>This<br>research work is organized in five chapters, for easy understanding, as follows</p><p>Chapter one is concern with the introduction, which<br>consist of the (overview, of the study), historical background, statement of<br>problem, objectives of the study, research hypotheses, significance of the<br>study, scope and limitation of the study, definition of terms and historical<br>background of the study. Chapter two highlights the theoretical framework on<br>which the study is based, thus the review of related literature. Chapter three<br>deals on the research design and methodology adopted in the study. Chapter four<br>concentrate on the data collection and analysis and presentation of<br>finding. Chapter five gives summary,<br>conclusion, and recommendations made of the study</p></b></b></b></b></b></b></b></b></b></b></b> <br><p></p>