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Addis Ababa University
College of Business and Economics

Department of Public Administration and Development Management
Assessment of the Process, Success and Challenges of Strategic

Planning in Commercial Bank of Ethiopia
By
Selamawit Guanche
June, 2018
Addis Ababa, Ethiopia

Department of Public Administration and Development Management
Assessment of the Process, Success and Challenges of Strategic

Planning in Commercial Bank of Ethiopia
By
Selamawit Guanche
Advisor: Gemechu Ararsa (PhD)
A thesis submitted to the Department of Public Administration and

Development Management of Addis Ababa University in partial fulfillment
of the requirements for the Degree of Masters in Public Management and
Policy (MPMP)
June, 2018
Addis Ababa, Ethiopia

DECLARATION
I, the undersigned, declare that this thesis entitled “Assessment of the Process, Success and
Challenges of Strategic Planning in Commercial Bank of Ethiopia”, is my original work

and has not been presented for a degree in any other university and that all sources of materials used
for the thesis have been duly acknowledged.
Declared by: Confirmed by Advisor:
Name: Selamawit Guanche Name: Gemechu Ararsa(PhD)
Signature: Signature:
Date: Date
Department of Public Administration and Development
Management
This is to certify that the thesis prepared by Selamawit Guanche entitled “Assessment
of the Process, Success and Challenges of Strategic Planning in Commercial Bank of
Ethiopia”, which is submitted in partial fulfillment of the requirements for the
Degree of Masters in Public Management and Policy (MPMP), complies with the
regulations of the University and meets the accepted standards with respect to
originality and quality.
Approved by Board of Examiners:
Signature_ Date
Advisor
Signature_ Date
Internal Examiner
Signature_ Date
External Examiner
Signature Date
Chair of Department or Graduate Programs Coordinator
Acknowledgments
First and foremost, thanks to God, the almighty, for giving health and courage from start to
complete this project. I would also like to thank the mother of JESUS, Kidist Dengel Mariam
continuous support throughout research work to complete successfully.
I would like to express great appreciation and gratitude towards my advisor Dr. Gemechu
Ararsa, for his critical comment ,helpful guidance, valuable support for each parts of the
paper, timely feedback and in general for his professional support in this study .
My sincere thanks also goes to Mesfin Tamiru who is my husband always standing by my side of
entire life.
I would like to acknowledge to my friend Yehualashet Tirago for her different support through
the process of the study.
Last but not least, I would like thanks to Commercial Bank of Ethiopia for their cooperation
during the process of data collection infilling and responding the questionnaires and interview.
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS .................................................................................................................. i
TABLE OF CONTENTS ....................................................................................................................... ii
LIST OF TABLES ............................................................................................................................. iii
ABSTRACT ............................................................................................................................................. vi
CHAPTER ONE....................................................................................................................................... 1
1. INTRODUCTION ............................................................................................................................... .1
1.1. Background of the Study ...................................................................................................... 1
1.2. Background of the Organization ........................................................................................... 2
1.3. Statement of the Problem...................................................................................................... 3
1.4. Research Questions............................................................................................................... 4
1.5. Objective of the Study.......................................................................................................... 4
1.5.1 General Objective…………………………..……………………………….………...4
1.5.2 Specific Objective………….……………….…………………….. ……….……...…5
1.6. Significance of the Study ...................................................................................................... 5
1.7. Scope of the Study ................................................................................................................ 5

1.8. Limitation of the Study ..................................................... ................................................. 6
1.10 Organization the study......................................................................................................... 6
CHAPTER TWO.........................................................................................................................................7
2. REVIEW OF RELATED LITREATURE ..........,,…..............................................................7
2.1. Concepts of strategy ...............................................................................................................7
2.2. Strategy planning ………………………………………….............................................. ..8
2.3. strategic Management …………………………...…………….……………………................ .10
2.3.1. The Five Tasks of Strategic Management.-..................................................... .........11
2.4. Strategic formulation...................................................................................................... 12
2.4.1. Strategic formulation and behavior …....................................................................13
2.5.The nature of strategy implementation ............................................................................ …13
2.5.1. Strategy implementation variables............................................................. .......... 16
2.5.2 Who implements strategy …............................................................................ …17
2.6. Implementing a strategy successfully ..............................................................................18

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2.7. Strategic Challenges ........................................................................................................... 19
2.7.1. Challenges of strategy implementation .................................................................... 20
2.7.2. Empirical Review…………………………...……………...…………………….20
CHAPTER THREE...................................................................................................................... 22
3. RESEARCH METHODOLOGY .......................................................................................... 22
3.1. Research Approach...............................................................................................................22
3.2. Data source.......................................................................................................................... 22
3.3. Data collection method ..................................................................................................... 22
3.4. Sampling techniques .......................................................................................................... 23
3.4.1. Target population................................................................................................... 23

3.4.2. Sampling method ................................................................................................... 23
3.4.3. Sample size ............................................................................................................ 24
3.5. Method data analyses ....................................................................... ................................ 25
3.6. Ethical consideration……...................................................................................................25
CHAPTER FOUR ...................................................................................................................... 26

4. DATA ANALYSIS DISCUSSION AND INTERPRETATION OF RESULTS…............ 26
4.1. General information of Respondents …................................................................................ 26
4.2. Realistic of strategic plan in CBE..................................................................................... 28
4.3. Strategic planning formulation process in CBE..................................... ............................33
4.4. Achievement of strategic plan in CBE ................................................................................37
4.5. Challenges faced implementation of Strategic plan in CBE ...............................................41
CHAPTER FIVE .................................................................................................................................... 47
5. SUMMARY OF MAJOR FINDINGS, CONCLUSION AND RECOMMENDATI
5.1. Summary of Major Findings ............................................................................................... 47
5.2. Conclusion ......................................................................................................................... 48
5.3. Recommendations.................. ............................................................................................ 48
5.4 Recommendations for Further Studies…………..………………………………………. 49
REFERENCES ........................................................................................................................................ 50
APPENDIX ...............................................................................................................................................53
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LIST OF TABLES
Table 3.1: Sample determination……………...................................................................................... 24

Table 4.1: General information of respondents................................................................................... 26
Table 4.2: Realistic of strategic plan in CBE………………….….................................................... 28
Table 4.3: strategic planing formulation process of in CBE.............................................................. .33
Table 4.4: Achievement of strategic plan in CBE .............................................................................. 37
Table 4.5: Challenges faced implementation of strategic plan in CBE............................................. 41
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Acronyms
CBE= Commercial Bank of Ethiopia

FCY=Foreign Currency
HR= Human Resource
PMS=Performance Management System
SP=Strategic Plan
SPSS = Statistical Package for Social Science
SWOT=Strength, Weakness, Opportunity, Threat
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Abstract
The study was conducted with the aim of assessing the strategic planning formulation process,
success and its challenges in CBE. Specifically, the objective of this study was finding answers
for four areas: to assess the strategic plan level of realistic, to identified factors that are
considered in the formulation process of strategic plan, to assess the extent of strategic plan
achievement, lastly to examine challenges that are affecting the success of strategic plan. This
study were using quantitative combined with qualitative (mixed) approaches and using
descriptive method. The study use primary data through questionnaire and interview from head
office from office of strategic management and grade 3,4 and special branches under north
Addis Ababa district city branches. After the data collected, analyzed, interpreted and discussed
the results by using SPSS 20 version software. The finding indicates that the organization
assessed environmental analysis before the formulation strategic plan helped to ensure
financial sustainability and soundness. The bank had the problem of network connection, power
supply and telecommunication and to get FCY easily from its customers. The conclusion and
recommendation part shows that strategic plan of the bank easily understand among majority
of employees, not all employees participated the strategic plan formulation process. The
researcher recommend some points like in order to minimize implementation challenges of
strategic plan to improve employees participation of strategic plan formulation process, to
develop quality service measurement and service delivery time, and to solve the connection
,power supply and foreign currency problems by using the maximum efforts of the bank.
Key words: Strategic Plan, Challenges, Formulation Process, Success
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CHAPTER ONE
1.Introduction
1.1 Background of the study
In today‟s fast moving competitive business environment, banking organizations that fail to
carefully and strategically plan for the future may not have much of one. The same holds true for
acquiring top talent and effectively on boarding them into the organization. Discussions about
Strategic Planning on boarding are finding their way onto more Board agendas as Directors seek
to better position their organization for the future and work to reduce costs associated with poor
retention. Unfortunately ,many find themselves unprepared for such discussions. Banking
organizations without disciplined approaches to Strategic Planning on boarding is taking
unnecessary and easily preventable risks. Ultimately it will cost more, in terms of money and
reputation, not to take a proactive approach. Both areas should be Board priorities in an ever-
changing and competitive business environment ( Sanjeepan,2017).
Strategic planning is carried out by the chief executive and his first line executives. It is concerned
with the broad concepts of the company in the future and the provision and allocation of total
resources to product-market opportunities to realize the company‟s profit potential through
selected strategies-tactical planning which embraces all the detailed plans and actions involved in
implementing it can be undertaken by the first line executives and those who report to them
(Hussey,1998).
Strategy is the outcome of a formal planning process and that top management plays the most
important role in this process. Valuable strategies often emerge from deep within the
organization without prior planning. Nevertheless, a consideration of formal, rational planning is
a useful starting point for our journey in to the world of strategy. Strategic planning is ongoing;
it never ends. Once a strategy has been implemented, its execution must be monitored to
determine the extent to which strategic goals and objectives are actually being achieved and
to what degree competitive advantage is being created and sustained. This information and
knowledge is passed back to the corporate level through feedback loops and becomes the input
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for the next round of Strategy formulation and implementation. Top managers can then decide
whether to reaffirm the existing business model and the existing strategies and goals or
suggest changes for the future (Hill and Jones, 2010).
Strategic planning is an essential management process in today‟s dynamic and competitive
world. Therefore, every organization including Commercial Bank of Ethiopia, is required to
have sound strategic plan and ensure its successful implementation. The aim of this paper study,
therefore, focuses on assessment of the process, success and challenges of strategic planning in
Commercial Bank of Ethiopia.
1.2 Background of the Organization

The history of the Commercial Bank of Ethiopia dates back to the establishment of the State Bank
of Ethiopia in 1942.CBE was legally established as a share company in 1963. In 1 9 7 4, CBE
merged with the privately owned Addis Ababa Bank. Since then, it has been playing Signiﬁcant
roles in the development of the country. Pioneer to introduce modern banking to the country.
Until September, 2017 it has 1235 branches stretched across the country. The leading African
bank with assets of 495,393 billion birr as on September,2017.Plays a catalytic role in the
economic progress & development of the country. The first bank in Ethiopia to introduce ATM
service for local users. Currently CBE has more than 16.6 million account holders and the
number of Mobile and Internet Banking users also reached more than1,312,945 as of
September,2017. Active ATM card holders reached 2,834,249.It has strong correspondent
relationship with more than 50 renowned foreign banks like Commerz Bank A.G., Royal Bank of
Canada, City Bank, HSBC Bank,...CBE has a SWIFT bilateral arrangement with more than 700
others banks across the world. CBE combines a wide capital base with more than 33,000
talented and committed employees. Pioneer to introduce Western Union Money Transfer
Services in Ethiopia early 1990s and currently working with other 20 money transfer agents like
Money Gram, Atlantic International (Bole), Xpress Money,... CBE has opened four branches
in South Sudan and has been in the business since June,2009.
VISION: To become a world-class commercial bank by the year 2025.
MISSION: We are committed to best realize stakeholders „needs through enhanced financial
intermediation globally and supporting national development priorities, by deploying highly
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motivated, skilled and disciplined employees as well as state-of-the-art technology. We strongly
believe that winning the public confidence is the basis of our success(CBE website
September,2017).
1.3 Statement of the Problem

Strategy planning is not simply an exercise in rational economic analysis. Strategies must conform
to the ethical and social expectations of the communities in which organizations operate. They
must also meet the personal values of top managers. Therefore, strategies should be based on the
deep understanding of an organization‟s ethical and social responsibilities. Ethically and socially
responsible strategies earn legitimacy and goodwill. The organizational processes by which
strategies are formulated have profound influence on the content of strategies. These processes are
influenced by many behavioral, social, political and ethical considerations. It is useful to view
strategic decision-making and decision outcome and implementation ratification (
Shrivastava,1994).
Strategy implementation directly affects the lives of plant managers, division managers,
department managers, sales managers, product managers, Project managers, personnel managers,
staff mangers, supervisors, and all employees. In some situations, individuals may not have
participated in the strategy-formulation process at all .There may even be foot-dragging or
resistance on their part. Managers and employees who do not understand the business and are
not committed to the business may attempt to sabotage strategy- implementation efforts in hopes
that the organization will return to its old ways (David, 1997).
Action must be the end product of planning, for without action planning is a pointless and
empty activity. All the benefits-of mental stimulation, careful analysis, the integration of more
facts in to decision making, and of the involvement and greater participation of managers in the
future of the company become ghostly shadows that lack substance and vanish in the harsh
light of reality. No company anywhere in the world has ever added a single penny to its
profits from making plans. The rewards are only relised when plans are implemented (Hussey,
1998).
Consideration of organizational components can help a business identify actual and potential
implementation problems, as well as determine how its organization would adopt to a new
strategy (Aker,1995).
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The commercial Bank of Ethiopia has implemented strategic plan for the sake of achievement
organizational objective. However, the report of the bank (2010/11-2014/15) shows the strategic
plan implementation process encountered various challenges like: human resource skill and
competency gap, malpractices in the industry, interruption of power supply and the problem of
network connection, liquidity mismatch and demand and supply gap, organizational structure,
physical resource management, under capitalization, inconsistency customer service quality, and
fragmented office at head office and districts (CBE Implementation-Assessment Report,(2010/11-
2014/15).
In order to cover this research gap, the researcher will investigate three major areas of
challenges. First, to assess the degree of human resource skill and competency gap affect
achievement of strategic plan of the organization like training program, coaching of managers
about the strategic plan of the year. Second, to identify the extent of mal practices problem
affects achievement of strategic plan. Third, to understand interruption of power supply and
problem of connection are to be the causes of customer dissatisfaction, inconsistence of service
delivery time and lack of quality service commitment.
1.4 Research Questions

The basic research questions that the study intends to address are as follows:-
1. To What extent Commercial Bank of Ethiopia to use a realistic strategic plan?
2. What is the process through which strategic plan i s f o rm ul at e d i n Commercial Bank
of Ethiopia?
3. To what extent the implementation of strategic plan successful in Commercial Bank of
Ethiopia?
4.What are the major challenges that are affecting the implementation of strategic plan in
Commercial Bank of Ethiopia?
1.5 Objective of the Study

1.5.1 General Objective
The general objective of the study focuses on to assess the formulation Process, Success and
its Challenge of strategic planning implementation in Commercial bank of Ethiopia.
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1.5.2 Specific Objective
1.To identify the soundness of the strategic plan in Commercial Bank of Ethiopia.
2. To assess the process through which formulation of strategic plan in CBE passes through.
3. To explore the extent to which CBE has successfully implemented its strategic plan..
4. To find out the major challenges that affect the implementation of strategic plan in CBE.
1.6 Significance of the Study

The study focuses on assessment of formulation process, success and challenges occurs
when implementing organizational strategic plan in CBE.
The study has further benefits:
1. The CBE to get the relevant information and feedback related to the strategic plan
implementation process.
2. It helps to give the necessary supportive information as an input for further researcher.
3.To provide additional knowledge and awareness about what the strategic plan implement
for the researcher.
4. The CBE take corrective action for its weakness to implement strategic plan successfully.
5.To give information for operational level employees to understand their organization strategic
plan looks like in detail.
1.7 Scope of the Study

This study focused on the f o r m u l a t i o n process, success and challenges in implementation of
strategic plan between 2010/11-2014/15 of CBE. Employees who are working office of
strategic management department in head office and s el e ct ed north Addis Ababa district city
branches (grade 3,4 and special) managers and operational level employees are included in this
study. It was therefore, all CBE staffs are not included :districts other than north Addis Ababa,
grade one and two branch manager and operational employees of north Addis Ababa district, all
districts manager and staffs inside and outside Addis Ababa, all head offices employees except
OSM.
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1.8 Limitation of the study
At the time of conducting the study, the researcher faced different problems including difficulty
of getting filled questionnaire and returned as the planned time, budget and time constraint
,difficult to get necessary information from the organization was major limitation of this research.
Moreover, since the research was conducted on one of the district of CBE among four districts
located in Addis Ababa and take one department of head quarter staffs does not cover the
whole employees of the bank.
1.9 Organization of the study

This thesis contains six chapters. The structure of these chapters are as follows: Chapter One:
Introduction comprises; background to the study, background of the organization ,statement of the
problem, research questions, research objectives, significance of the study, scope of the study and
limitation of the study. Chapter Two: Literature review; this Part contains the theoretical
background of strategic planning formulation process, success and challenges of
implementation that are affecting achievement of strategic plan. Chapter Three: Research
Methodology; this chapter will discuss the techniques used in conducting the study; addresses the
research approach, target population, sampling method, data collection methods and ethical issues.
Chapter Four: data analysis, discussion and interpretation of results; This chapter presents the
overall results of the research findings by using quantitative combined with qualitative data
based on the data collected through questionnaire and interview. After collected the data,
analyze, discuss and interpret results data by using descriptive method. Chapter five: Summary
of findings and recommendations; this chapter contains summary of overall findings of the study
and try to give suggestion on improving areas of the organization in the future presentes at the
recommendations part.
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CHAPTER TWO
2.Review of Related Literature

2.1. Concepts of Strategy
According to the famous Webster dictionary, the word “strategy” means “artful means to some
end.” Thus a strategy is essentially about discovering “artful” or “imaginative” means to achieve
our “ends” or “goals. ”The concept of strategy originated from the lexicon of armed forces, where
strategy implies the science of planning and directing large-scale military operations, (as
distinguished from tactics) of maneuvering forces into the most advantageous position prior to
actual engagement with the enemy. Like many concepts in modern management, the concept of
strategy was first adopted by the private sector in its pursuit to win commercial battles with its
competitors. Later, it trickled down to the public sector and is being applied by governments to
win their wars against poverty, underdevelopment and social injustice (Kumar, 2010).
However, different authors have defined “strategy” in different ways. Some define the concept
broadly to include both goals and means of achieving them. Chandler(1962)and Ansoff(1990)
define strategy narrowly by including only the means to achieving the goals. The definitions
suggest that the authors gave selective attention to aspects of strategy, which are all relevant to
our understanding of the concept.
At the most fundamental level, a strategy is about creating clarity of purpose. When everyone in a
government agency or system is clear about its fundamental purpose or purposes, improving
performance is far, far easier. This no doubt appears very simple and obvious. Yet, it is also very
rare. Most government agencies around the world have multiple goals, some of which even
conflict with each other. This leads to lack of clarity about what is most important. When they are
asked to improve performance, they charge off in different directions. A strategy and a strategic
plan based on this strategy are both part of strategic management. It is not possible to have a
strategic plan without a clear strategy (Kumar, 2010).
Strategies become continuously redefined as the knowledge of the organization evolves and
allows new insight. Thus it is necessary that strategy adapts to the changes and become more
dynamic and gets consecutively revised. Slater and Olson(2001) complement that the consistency
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of strategy is vital, meaning that strategy throughout the company should be in line with the
overall direction of the company and its goals. Opposed to their view Govindarajan(1988)
recognized that “different business units within the same corporation often pursue different
strategies and that the administrative mechanism that corporate headquarters use to manage
those businesses should differ”. Finally Beer and Eisenstat (2000) are mentioning that
responsible people in this phase should consider stating what not to do and stressing what is most
important, this leads to a higher understanding of employees that are expected to behave
according to the new strategy. Strategic consensus Noble(1999) already focused on involving
people from different functions, the next important factor is the degree to which inter
organizational strategic perceptions are congruent.
In their work (Rapert,Velliquette and Garretson,2002) concern themselves with strategic
consensus, in specific on shared understandings and priorities. Consensus is key, because
strategies can be interpreted in a diverse set of ways. It is the manager‟s responsibility to
promote and unified direction of the people in the organization. Strategic consensus is connected
with implementation success and increased performance. As a mean of enhancing strategic
consensus frequent vertical communication plays a crucial role. As organizations are social
collectives the communication is a mechanism to transmit ideas and values and increases the
identification, which is also linked to Noble‟s(1999) involvement in the formulation stage.
Rapertetal.(2002) see a lack of clear common understanding as a major barrier to strategy
implementation. This is in line with the opinion of Beer and Eisenstat(2000) organizations would
lack strategic consensus and clarity about goals and direction. Noble (1999) found out, when
people have a poor understanding of broader scope and goals they are not able to work
sufficiently to reach a different organizational stage with a new strategy ( Brinkschröder,2014).
2.2 Strategy planning

Strategic planning-Before the next decade was reached the more advanced thinkers and
practitioners recognized that strategy should be at the heart of the process. Although operational
planning and strategic planning are inter wined, it is the latter which should be the driver. The
short term plans and systems should be driven by the long-term perspective. Because of this more
emphasis should be placed on strategy, and the title ‟Strategic Planning‟ began to take over from
„Corporate Planning‟, but the later persisted as a description although may might have applied the
8
more strategic orientation. The change was largely a shift of emphasis, not necessarily initially of
the over all approaches to the process of planning which till tended to focus on formal plans
achieved through a corporate wide process. The links that were intended from this shift of
emphasis were not always achieved, and even much later research found that the few
organizations were succeeding in driving the organization through the strategy, and integrating
that the strategy in to the annual budget and objectives and actions of managers throughout the
organization(Hussey,1998).
A strategy is simply a plan. It is an executable plan of action that describes how an organization
will achieve a stated mission. Organizations often formulate company strategies, product and
service strategies, and strategies that drive operational, support and managerial processes.
Strategy consists of the whole array of competitive moves and business approaches that
managers employing running a company. In crafting a strategic course, management is saying
that “among all the paths and actions we could have chosen, we have decided to going this
directing and rely up on these particular ways of doing business.” A strategy thus entails
managerial choices among alternatives and signal organizational commitment to specific
markets, competitive approaches, and ways of operating (Strickland, 1998).
Organizational objectives are the part of strategic plan most often spelled out explicitly and
communicated to managers and employees. A number of companies present key elements of their
strategic plan in company‟s annual report to shareholders or in statements provided to the
business media, while others, perhaps for reasons of competitive sensitivity, make only vague
general statements about their strategic plans that could apply to most any company
(Strickland,2003).
Strategy and strategy plan-Developing a strategy vision and mission, establishing objectives, and
deciding on strategy are basic direction- setting tasks. They map out where the organization is
headed, its short-range and long-range performance targets, and the competitive moves and
internal action approaches to be used in achieving the targeted business results. Together, they
constitute a strategic plan for coping with industry and competitive conditions, the expected
actions of the industry‟s key players, and the challenges and issues that stand as obstacles to the
company‟s success.
In companies committed to regular strategy reviews and development of explicit strategic plans,
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the strategic plan may take the form of a written document describing the industry‟s economics
key success factors, and drivers of change along with the company‟s strategic plan for dealing
with external and internal environment(Strickland,2003).
Some companies circulate strategic plan to most all managers (and perhaps selected employees),
although some of the planned strategic initiatives may be expressed in general terms or omitted if
they are too sensitive to reveal before they are actually under taken. In other companies, the
strategic plan is not put in writing for widespread distribution but exists only in the form of oral
understandings and commitments among managers about where to head, what to accomplish and
how to proceed (Strickland,2003).
2.3 Strategic Management

Strategic management is defined as the set of decisions and actions that results in the formulation
and implementation of plans designed (Pearce and Robinson,2007).Strategic management
according to Noe etal.(2006) is a process for analyzing an organization‟s competitive situation;
develop strategic goals and devising a plan of action and allocation of resources that will increase
the likelihood of achieving those goals. According to Dyer cited in Noe et al.(2006) strategic
management is a process, an approach to address the competitive challenges an organization
faces. It is managing the pattern or plan that integrates an organizations major goals, policies
and action sequences into a cohesive whole (Quinn,1980).
The main functions of strategic management have been explained by Robbins and Coulter
(1996) as identifying the organization‟s current mission, objectives, and strategies, analyzing the
environment, identifying the opportunities and threats, analyzing the organization‟s resources,
identifying the strengths and weaknesses, formulating and implementing strategies, and
evaluating results.
According to Walker (1998), it is the business strategy which defines a company's plan for its
future growth,development and profitability.Strategic management determine the organizational
relations to its external environment, encompass the entire organization, depend on input from all
of functional areas in the organization, have direct influences on the administrative and
operational activities,and are vitally important to long- term health of an organization
(Shirley, 1982).
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Using a strategy to manage an organization or an economy is called “Strategic Management”. It
helps governments define their Visions and core purposes the outcome goals that are most
important to them and aim their entire system at fulfilling them. A strategic management
system gives leaders the ability to anticipate future trends, define the future they want, and
allocate their resources and staff to the task of creating that future (Kumar,2010).
Strategic management is the set of managerial decision and action that determines the long-run
performance of a corporation. It includes environmental scanning (both external and internal),
strategy formulation (strategic or long range planning),strategy implementation, and
evaluation and control. The study of strategic management therefore emphasizes the
monitoring and evaluating of external opportunities and threats in lights of a corporation‟s
strengths and weaknesses(Noe et al., 2006).
The key concept in the strategic management process is the term strategy. A strategy according
to Chandler (1996) is defined as the determination of basic long-term goals and objectives of an
enterprise and the adoption of causes and actions and the allocation of resources necessary for
carrying out these goals. Strategy is thus according to Ansoff (1965) a means of achieving goals.
It specifies the competitive posture of the organization in the market place. Porter (1980)
argued that strategy is the central vehicle for achieving competitive advantage in the market
place. Hence, the aim of a strategy is to establish a sustainable and profitable position against the
forces that determine industry competition. The process of planning and managing the resources
using strategy is referred to as strategic management(Pearce and Robinson,2007).
2.3.1 The five tasks of strategic Management
The strategy-making, strategy implementing process consists of five interrelated managerial
tasks:
1.Forming a strategic vision of what the company‟s future business makeup will be and where
the organization is headed. So as to provide long- term direction, delineate what kind of
enterprise the company is trying to become, and infuse the organization with a sense of
purposeful action.
2.Setting objectives-converting the strategic vision in to specific performance out comes for
company to achieve.
3.Crafting a strategy to achieve the desired outcomes.
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4.Implementing and executing the chosen strategy efficiently and effectively.
5.Evaluating performance and initiating corrective adjustments in vision, long-term direction,
objectives, strategy or implementation in light of actual experience, changing conditions, new
ideas, and new opportunities (Strickland,1998)
2.4 Strategy Formulation

Strategy formulation is the development of long-range plans for the effective management of
environmental opportunities and threats, in light of corporate strengths and weakness. It includes
defining the corporate mission, specifying achievable objectives developing strategies, and
setting policy guidelines (Hunger,2000).
Strategy formulation occurs at the corporate, business unit, and functional area levels. The
content of different types of strategies varies at each level. Corporate level strategies determine
the product market domain of the firm. They determine the types of businesses and the level of
diversity in the firm‟s business portfolio. Firms commonly pursue three types of corporate
strategies. Dominant product strategy limits a firm‟s domain to a single product; it thus has high
risk. Related diversification strategy refers to operating in several related products markets. At
the business unit level, strategies seek to establish sustained competitive advantage. They try
to shelter businesses from a turbulent environment. Generic business unit strategies commonly
pursued by firms include the least cost strategy, differentiation strategy, and niche strategy
(Shrivastava,1994).
Strategy formulation-Successful organizations engage in strategy formulation, generating
alternative strategies and choosing from among them the one that will best achieve strategic
objectives. Strategies are major, comprehensive, and usually long-term plans (although the
typical time frame is shrinking) for accomplishing strategic goals and objectives, and hence
fulfilling the organizations vision and mission strategies indicate the integrative and unifying
pattern of decisions to achieve organizational purposes, resources, and at the business level, the
firm‟s perception of a sustainable competitive advantage.
In setting strategic objectives and formulating strategy, organizational strategists examine
information about the vision, mission, goals, policies, and internal and external environments.
Strategy formulation is often referred to as strategic planning (Higgins and Vincze, 1993).
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2.4.1Strategy Formulation and Behaviors
In practice, however, there is significant difference between intended and realized
strategies. Realization part of the intended strategy may not occur because all intensions were not
clear or well articulated. Another part of the intended strategy may fail because of failures in
strategy implementation. In addition, modification of intended strategies sometimes occurs to fit
changed environmental and internal conditions (Mintzberg and Waters,1985).
A host of behavior social and political factors influence the strategy-making process. Instead of
being comprehensive,planned,and rational process, strategy making can sometimes be disjointed
and incrementalism.Quinn(1998) used the term logical incrementalism to describe such
processes.Logical incrementalism acknowledges that organizational goals are complex,
changing, and unclear. It involves artfully blending formal analysis, behavioral techniques, and
power politics to move organizations toward broadly conceived goals. In this process, strategy
formulation and implementation are not separate; rather, they are integrated in to a single-
decision making process. The process begins with identification of strategic problems. Strategic
problems are ill-structured, multifaceted, and not easily apparent. Their identification or
formulation is time consuming. Managers try to familiarize themselves will all facets of the
problem may be formulated (Mintzberg, Raisinghani, and Theoret,1976).
2.5 The nature of Strategy Implementation

strategy implementation varies substantially among different types and sized of organization.
Implementing strategies require such actions as altering sales territories adding new
departments, closing facilities, hiring new employees, changing on organization‟s pricing
strategy, developing financial budgets, developing new employees benefits establishing cost-
control procedures, changing advertising strategies, building new facilities, training new
employees, transferring manages among divisions, and building a better management information
system. These types of activities obviously differ greatly between manufacturing service, and
governmental organizations (David, 2011).
Strategy implementation is the process used to implement specific policies, programs, and
action plans that allow a firm to utilize its resources to take advantage of opportunities in a
competitive environment Harrington and Ottenbacher,(2011). Implementation involves a variety
of facets of the firm and requires involvement by organizational members to gather support,
13
information, and commitment to allocate resources effectively (Schmelzer and Olsen, 1994).
Atkinson (2006) suggests two main reasons for the neglect of strategy implementation. First, the
field of strategy implementation is considered to be less“ glamorous” as a subject area. Second,
there are difficulties involved in investigating the topic, as it is thought to be fundamentally
lacking in conceptual models. As result of this type of criticism, a number of conceptual models
for studying strategy implementation have been suggested(E.g. Okumus,2003; Crittenden &
Crittenden,2008).
Hrebiniak (2006) stated that formulating strategy is difficult; however, executing it throughout
the organization-is even more difficult. Without effective implementation, no business strategy
can succeed. Hrebiniak (2006) also argued that most managers know far more about developing
strategy than they do about implementing it. This neglect of strategy implementation leads to
poor performance both in relation to current execution and in future strategy formulation
processes(Crittenden and Crittenden ,2008).
Bonoma and Crittenden (1988) indicate that strategies are implemented through the structure,
with managerial skills as key indicators of the successful or unsuccessful accomplishment of
the implementation retention.
Strategy implementation is usually considered after strategy has been formulated,
implementation is a key part of strategic management. Strategy formulation and strategy
implementation should this be considered as two sides of the same coin poor implementation
has been blamed for a number of strategic failure(Wheelen and Hunger,2000).
A number of scholars have described the strategic management process as consisting of several
steps (Pearces and Robinson,2007). Pearce and Robinson (2007) approach identifies two main
steps, namely strategy formulation and implementation. Schermerhorn (1989) points out that
strategy must be well formulated and implemented in order to attain organizational objectives.
Strategy formulation which is also called strategy planning, is the process of choosing among the
various strategies just discussed, and adapting them to fit the organization‟s actual
circumstances. In other words, the essence of strategy formulation is to design a strategy that
makes the most effective use of core resources and capabilities. Grant (1991) claimed that
these resources and capabilities played a pivotal role in the competitive strategy.
Some of the elements accounting for this supportive environment have touched on leadership,
14
organization structure, organization culture and provision of all other needed economic
resources. The role of this climate in the success of strategy implementation is seen in a
wide range of literature that advocates for development of organizational cultures and
climate for facilitating strategy implementation through programs such as organization
development and change, human resource management, organization learning and creating of
learning organizations (Kovacic and Bosilj-Vuksic,2005; Martin, 1998). In spite of this reality
most attention in strategic management has been given to strategy formulation process ignoring
the role of implementation activities (Al-Ghamdi,1998).
Strategy implementation-is the process of translating strategy in to actions and results.Four
primary issues are involved in implementation: structuring the organization, employing
appropriate implementation systems, adopting the proper management style, and managing
organizational culture (or shared values) (Higgins and Vincze,1993).
Strategy implementation is often called the action stage of strategic management. Implementing
means mobilizing employees and managers to put formulated strategies in to action. Often
considered to be the most difficult stages in strategic management strategy implementation
require personal discipline commitment and sacrifice. Successful strategy implementation
hinges upon the managers ability to motivate employees, which is more an art than a science
.Strategy formulated but not implemented serve no useful purpose (David, 1997).
The strategy-implementing/strategy executing/task is easily the most complicated and time
consuming part of strategy management .It cuts across virtually all facets of managing and
must be initiated from many points inside the organization emerges from carful assessment of
what the organization needs to do differently or better.Each manager has to answer the question.
”What has to be done in many areas to execute my piece of the strategic plan and how can I best
get it done?” How much internal change is needed depends on how much of strategy is new,
how far from what the strategy requires, and how we l l strategy and organizational culture
already match. Depending on the amount of internal change involved, full implementation and
proficient execution can take several months to several years (Thompson and Strikland,2003).
Implementation successfully initiated in three interrelated stages:
1. Identifications of measurable, mutually determined annual objectives.
2. Development of specific functional strategies.
15
3. Development and communication of concise policies to guide decisions.
Annual objectives guide implementation by converting long-term objectives in to specific,
short term ends. Functional strategies translate grand strategy at the business level into current
action plan for subunits of the company. Policies provide specific guidelines for operating
managers and their subordinates in executing strategies (Pearce and Robinson,2003).
Strategy implementation is a process by which strategies and policies are put in to action
through the development of programs, budgets, and procedures. This process might involve
changes within the overall culture, structure, and/or management system of the entire
organization. Except when such drastic corporate wide changes are needed, however, the
implementation of strategy is typically conducted by middle and lower level managers, with
review by top management. Sometimes referred to as operational planning, strategy
implementation often involves day-to-day decisions in resource allocation (Wheelen and Hunger,
2006)
2.5.1 Strategy Implementation variables
Resource allocation for strategy Implementation
Every strategy requires the organization to undertake new strategic programs. Often, the set
programs involve development of new products, entry to new markets, capital investments,
resource structuring of production capabilities, and so forth. Setting up these programs, requires
allocation of appropriate financial, material, and human resources. The resources must be made
available to managers who are in charge of strategy implementation ( Shrivastava,1994)
Role of structure and systems in strategy implementation

Organizational structure refers to the pattern of authority and responsibility relationship existing
in an organization. Structural development occurs by differentiating or dividing up tasks in to do
able parts, grouping similar tasks together, and coordinating tasks to achieve organizational
structures specifies the allocation of responsibilities for specific tasks. Organizational tasks are
divided based on specialization or special skill requirements. This involves roles and allocating
responsibility for completing groups or tasks to specific roles(Hax and Majluf,1981).
Skills and staff for strategy implementation

Skills refers to the capabilities and dominant attribute of companies that allow them to assume
tasks and functions with unique competence. Skills allow firms unique competitive advantages
(Shrivastava,1994).
16
Role of culture in strategy implementation
Organizational culture refers to the system of shared value and beliefs about how the
organization should be managed. It includes values, mores, customs, and behavioral norms that
guide organizational actions. Shared values act as a glue that binds of organizational members
together ( Shrivastava,1994).
Corporate culture
Most organizations do not possess a single homogeneous culture. Organizations have different
cultures at different hierarchical levels and in different departments. They are multicultural
entities. Strategic management must be sensitive to the cultural orientations within an
organization (Shrivastava,1994).
Role of performance evaluation and reward system

A key success factor for strategy implementation is building motivation and commitment among
managers. After allocation specific responsibilities for strategic tasks and programs, management
must ensure that responsible individuals actually perform their tasks. They must be
motivated and committed to the new strategy. The main difficulty in motivating employees to
implement new strategies arises from the fact that new strategies invariably involve risks,
imply changes in power relationships, and create uncertainties about the future
( Shrivastava,1994).
2.6 Who Implements Strategy?

Depending on how the corporation is organized, those who implement strategy probably be
a much more diverse set of people than those who formulate it. In most larger, multi-industry
corporations, the implementers are everyone in the organization. Vise presidents of functional
areas and directors of divisions or sport work with their subordinates to put together large-scale
implementation plans, plant managers, project managers and limit heads put together large-scale
implementation plans. Plant managers, project managers and unit heads put together plans for
their specific plants, departments and units. Therefore, every operational manager town to the
first-line supervisor and every employees is involved in some way in the implementing of
corporate, business, and functional strategies (Wheelen and Hunger,1998).
17
2.7 Implementing a strategy successfully
A carefully prepared and solid strategic plan is no longer enough profitable success unless it
links virtually every internal and external operation of an organization with a focus on customer
needs. Ten steps are required for corporate strategies to become an integral part of an
organization‟s culture (Feo and Janssen,2001).
1.Establish a vision: strategic deployment begins with a focus on customers. A common
vision defines the benefits of a customer, employee, shareholder, or society can expect from a
company .If there is agreement on overall direction, the means to achieve it can be flexible.
2.Agree on a mission: often confused with vision, a mission statement answers the question
“What business(es) are we in?” and clarifies a company‟s purpose or reason for existence-
noting more.
3.Deploy key strategies: the first step in converting a vision to an achievable plan is the
development of four or five strategies that contribute to the overall vision. Obtain, validate and
assess data in five areas: customer loyalty and satisfaction, costs of poor quality, company
culture and employee satisfaction, the internal business process including supplier, and
competitive benchmarking. Analysis of these strategies will surface strengths, weaknesses,
opportunities, and threats related to customers, quality and costs. Once complete, strategies
can be created or modified to reflect measurable and observable long-term goals.
4.Develop Strategic goals: be specific, measurable and within a set time -typically one to two
years. There are seven areas which must be examined: product performance, competitive
performance, cost of poor quality, performance of business processes, customer satisfaction,
and customer loyalty and retention.
5. Establish values: values are what an organization stands for and believes in supported by
actions and deeds from management. Training and communication of the values for all
employees is fundamental.
6.Communicate company policy: policy declaration as a guide to managerial action are necessary
during change, and result from through deliberation by management with approval the highest
level. There has been an unprecedented surge in publishing policies based on quality and
customer focus.
7.Provide top management leadership: a basic ten in establishing any strategic plan is
18
participation of senior management acting as an executive council. The council is responsible
for executing the strategic business plan and monitoring key performance indicators. Business
units have similar councils at their levels. A very important element in this overall processes
is that the necessary resources-such as poor tools, time to get together, and education-are
made available to the employees who are expected to achieve the customer-oriented goals.
8.Deploy goals: deployment of long-and short-term goals is the conversion into operational plans
and projects- subdividing goals and allocating sub- goals with careful attention to
details, participants, schedules and milestones.
9.Measure progress with key performance indicators: an organized approach measurement is vital
because performance measures indicate the degree of success. Measurement monitors
continuous improvement, and individual, team and business unit performance. The best
measures for implementing this process are simple, quantitative and graphical.
10.Review progress: a formal review will increase the probability of reaching the goals. An
organization should look at the gaps between measurement of current conditions and the
targets. Key performance indicators include the design of a scorecard or report package.
A scorecard includes indicators at the highest levels of the company, quantitative reports
based on data, and narrative reports on matters such as threats, opportunities, events, and
audits. These scorecards are required to meet the requirements of performance excellence
criteria.
2.8 Strategic challenges

Strategies in all types of organizations are confronted with more strategic challenges than ever
before. Ten key strategic challenges can be identified: changes in all aspects of business are
accelerating, competition is increasing, business is globalizing, new technologies are
revolutionizing competition, the workforce is changing dramatically in terms of composition and
expectations, significant resources shortages are developing, business functions in a newly
forming knowledge-based society, unstable market and economic conditions create doubts as to
suitable actions, all constituents are making increasing demands, and complexity is increasing in
the strategic management environment (Higgins and Vincze,1993).
19
2.8.1 Challenges of Strategy Implementation
Challenges of strategy implementation is important for managers to understand and
identify the pitfalls and challenges that can occur during the process to improve the effective
implementation. To know which pitfalls can emerge could help to prevent them and can lead to a
more proactive approach. During the process the identification is necessary to solve challenges (
Brinkschröder,2014).
Many organizations face significant difficulties with regards to strategy implementation process
(Hrebiniak, 2006).As Noble (1999) notes, mosttions best-formulated strategies fail to produce
superior performance for the firm due to poor implementation.
Globalization:- A challenge to strategic management As more industries become global, strategic
management is becoming an increasingly important way to keep track of international
developments and position the company for long-term competitive advantage.
Globalization presents a real challenge to the strategic management of business corporations.
How can any one group of people in any one company keep track of all the changing
technological, economic, political, legal and social, cultural trends around the world? This is
clearly impossible. More and more companies are realizing that this must shifts from a vertically,
organized, top down type of organization to a more horizontally managed, interactive
organization ( Hunger,2000).
2.9 Empirical Review

Several studies such as those by Ansoff (1988) and by Layton (1991) showed that a formal
strategic planning system was an important factor in leading to corporate success, as measured by
financial performance. Other researchers of the strategic planning activity such as Watts (1987)
and Malik and Karger (1975) have reported conflicting evidence which both supports and refutes
the significance of a formal strategic planning process on the corporate success of an organization.
Many other contributors to the planning literature, such as Steiner (1979) and Drucker (1974)
agree that a formal planning system is an important factor leading to corporate success. (Success
is typically defined in terms of financial performance in the business community). As these major
writers indicated, planning is an important factor of corporate success. The saying that, if you
don‟t know where you are going, any road will lead you there, illustrates that need for planning,
as a business must know where it is going.
20
Another well-known management writer Ansoff (1988) indicated that the prescriptions which
have been developed for strategic planning were based upon three underlying assumptions. First,
reasonable people will do reasonable things, and that managers will therefore welcome new ways
of thinking and will cooperate wholeheartedly. The second assumption was that the key problem
in strategy was to make the right decision and that existing operation implementation system and
procedures would effectively translate strategic decisions into actions. The third basic assumption
was that strategic formulation and strategic implementation are sequential and independent
activities.
In keeping with the theme of a turbulent environment and the need to anticipate change, Gebelein
(1993) stated that structural changes often take place much faster than expected. The strategic
choices that companies make now will limit choices and raise new strategic issues in the future.
In short, an industry‟s structure must be continually analyzed, and plans must be created or
modified in response to market changes.Ruocco and Proctor (1994) argue that when an
organization engages in strategic planning that a structured approach to the process is
recommended over the unstructured or informal approach to long-range planning. They also noted
that the perceptions of the senior management team involved in the strategic planning process
were a critical component in the success of the planning process.
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CHAPTER THREE
3. Methodology of the Study
This chapter consists an overview of research design approaches, source of data, data collection
methods, sampling techniques, method of data analysis and ethical issue.
3.1 Research Approach

The study applied both quantitative & qualitative approaches (Mixed Approach) helps to get
relevant information and understand the formulation process, success and challenges of the
strategic plan implementation. In order to collect the data from strategic management department
employees, selected branch managers as well as operational level employees, the two approaches
helps to gather data it can be measurable/number based and also support to identifying
the information related to qualitative data method. The descriptive research allowed the study to
identify the problem and investigate the respondents view and exploring related issued. The
aim of survey method to express the situation exists within the organization.
3.2 Data Sources

The study makes use of primary and secondary data sources. Primary data collected from office
of strategic management department employees, selected branch managers as well as operational
level employees through questionnaire and interview. The secondary data gathered from books,
internet and bank‟s website.
3.3 Data Collection Methods

The primary data collected using questionnaires and interview for office of strategic
management department employees, selected branch managers as well as operational level
employees. The questionnaire contains open-end and close-ended questionnaires. Close ended
questionnaire has five point Likertscale (From strongly agree to strongly disagree).Open ended
questionnaire to get relevant information which are undetermined by the researcher. In all 125
questionnaires were distributed to the selected samples respondents and the researcher personally
was collected all completed questionnaires from the respondents at their respective head
office and branches of CBE.
Structured interview helps to gather necessary information about the strategic plan formulation
22
process, success and its implementation challenges. For OSM department and branch manager
who can assume to represent the whole respondents for this study. The interview were based on
the structured interview guide with all the relevant 4 questions clearly written down before the
commencement of the interview sessions for grade 3,4 and special branches selected managers
and for a director of OSM. Questions that are not included in the interview guide but
considered necessary were also asked during the interview session and the responses were write
down on the spot.
3.4 Sampling Techniques

3.4.1 Target Population
There are fifteen districts of CBE located different geographical areas throughout the country and
head quarter located in Addis Ababa. For this study the researcher select north Addis Ababa
district only. The population of the this study, employees who are working at north Addis Ababa
district city branches grade 3, 4 and special of managers and operational level staffs and office
of strategic management department employees of the bank totally 1,162.
3.4.2 Sampling Method

The sample of the study selected to be representative of the entire population .The researcher
gather information from office of strategic management department staffs in head quarter,
branch managers and operational employees under north Addis Ababa district city branches
which are grade 3, 4 and special branches. Under north Addis Ababa district highest number of
branches opened next to west Addis Ababa district of the bank and also it has four special
branches better than the other districts. From these special branches can get relevant & better
information from a number of experienced employees by minimum effort, time and money about
the process, success and challenges face the implementation of strategic plan and also all
branches operate their activities in a similar manner. It is appropriate district for this study and
convenience to the researcher.
23
3.4.3 Sample size
The researcher determine and calculate the sample size based on known target population. The
total populations of the study are 1,162. Among 20 office of strategic management employees the
researcher take all. From the total of 25 branches, grade 3 are 12, grade 4 are 9 and special
branches are 4. From a total of 25 managers take 2 from grade 3, take 2 from grade 4and
similarly take2 from special branches managers. The total 1,117 of grade 3, 4 and special
branches operational employees take randomly selected. Because assumed to work similar
activities with all branches. Due to time and budget constraint and the nature of the population
and sample respondents similarity, the researcher used sample size determination method
developed by (Carvalho,1984) was applied to determine a sample size. Therefore, based on
( Carvalho, 1984) sample size determination method, the researcher take a large sample size
selected for accuracy of data 125 employees who participated in this particular study.
Table 3.1: Sample size determination
Population size Small Medium Large

51-90 5 13 20
91-150 8 20 32
151-280 13 32 50
281-500 20 50 80
501-1200 32 80 125
1200-3200 50 125 200
3021-10000 80 200 315
10,001-35,000 125 315 500
35001-150,000 200 500 800
Source :Carvalho (1984)
24
3.5 Method of Data Analysis
After the necessary data is collected from relevant primary sources, it will be analyzed
through qualitative and quantitative analysis methods. The researcher using descriptive research
method helps to describe and identify the necessary information. Descriptive research allows to
investigate the problem by exploring the views of different sets of respondents and existing
situation.
3.6 Ethical Consideration

There researcher follow ethical code through respect respondent side and their contribution for
completion of the study. At the time of gathering data employees who have provide the
information based on standardize interview and completed the questionnaire maintains their
privacy confidentially.
25
CHAPTER FOUR
4. Data Analysis, Discussion and Interpretation of Results
A total of 125 questionnaire were distributed to respondents and 102(81.5%) were returned. The
questionnaire were developed in five Likert scale ranging starts from strongly agree, agree,
neutral, disagree and lastly strongly disagree. These five scale interval can be analyzed by using
descriptive method of central tendency. The collected data were analyzed, discussed and
interpreted by using Statistical Package for Social Sciences (SPSS) version 20 software. In
addition to questionnaire results, the researcher gathering information by using interview from a
director of OSM and six managers who are working north Addis Ababa grade 3,4 and special
branches from each grade take two managers to investigate their opinion presents under this
section.
4.1 General information of Respondents

This section presents the general information of respondents gender, age, marital status,
educational qualification, work experience, work position, service year of managerial position and
department. To describe the respondents demographic information descriptive statistics was
performed.
Table 4.1 General Information of Respondents
Categorized Group Frequency Percent Valid Cumulative
percent Percent
Male 73 71.6 71.6 71.6
Gender
Female 29 28.4 28.4 100
Total 102 100.0 100.0
Less than 25 years 19 18.6 18.6 18.6
Between 26-35 years 70 68.6 68.6 87.3
Age Between 36-45years 13 12.7 12.7 100.0
Total 102 100.0 100.0
Diploma 3 2.9 2.9 2.9
Degree 73 71.6 71.6 74.5
Educational Master's degree 25 24.5 24.5 99.0
Status PhD 1 1.0 1.0 100.0
Total 102 100.0 100.0
26
Single 55 53.9 53.9 53.9
Marital Married 47 46.1 46.1 100.0
status
Total 102 100.0 100.00
Less than 5 years 58 56.9 56.9 56.9

Work Between 5-8 years
24 23.5 23.5 80.4
Experience Between 9-11 Years
10 9.8 9.8 90.2
Between 12-15 years 10 9.8 9.8 100.0
Total 102 100.0 100.0
Managerial 13 12.7 12.7

12.7
position Non-managerial 100.0
89 87.3 87.3
Total 102 100.0 100.0
1 - 5 years 11 10.8 91.7 91.7
Managerial service 6-10 years 1 1.0 8.3 100.0
year
Total 102 100.0
North Addis Ababa district 91 89.2 89.2 89.2
city branches(Grade3,4 and
Department special
Strategic management 11 10.8 10.8 100.0
department
Total 102 100.0 100.0
Source: The research survey,2018
As table 4.1 indicates, majority of respondents are male 71.6%.This shows that n u m b e r
o f male greater than female s t a f f within the bank.
Majority of the respondents were between 26-35 age group 68.6%.This shows that most of
the employees were young and energetic group.53.9% of the respondents were single, the rest
46.1% were married there is no divorced or widow/widower staff found in the bank.
Another important attribute to identify of the bank is educational level. As the study indicates
that the largest share group of the bank had first degree holder 71.6%. Respondents who have
27
master‟s degree 24.5%.Diploma holder 2.9% and only one PhD holder employee found in the
bank. The statistics indicated that majority of the respondents had holder of first degree. This
shows that the bank recruit fresh graduate employees.
Next to bachelor degree holder, master‟s degree holder were largest than diploma and PhD
holder of the bank employees.
The study shows that 56.9% of employees working experience less than 5 years. This shows that
majority of the employees had no enough working experience.
Majority of the respondents 87.3% were non managerial and 12.7% of the respondents are
managerial found in strategic management department and grade 3, 4 and special branches of
north Addis Ababa district city branches.
91.7 % of respondents worked at managerial level their work experience for 1-5 years.8.3% of
respondents worked at managerial level for 6-10 years.
Last element general information of respondents was department. Department of strategic

management respondents were 10.8% of the total respondents of the study.89.2% of respondents
were from north Addis Ababa district city grade 3, 4 and special branches.
4.2 Realistic of strategic plan in commercial Bank of Ethiopia (CBE)

In this section, to assess the degree of SP soundness to consider organizational vision, mission,
service quality, resource, environmental analysis, to create positive communication and planning
team among staffs, periodical review, define responsibility and accountability, appropriate
sequence and priority , to be a good marketing tool and clarity of language to understand simply.
To describe the soundness of strategic plan descriptive statistics was performed.
28
Table 4.2 Realistic of strategic plan in (CBE)
Degree of Valid Cumulative

Realistic of strategic plan Agreement Frequency Percent Percent Percent
The strategic plan clearly Strongly agree 34 33.3 33.3 33.3
identifies the vision of the Agree 49 48 48 81.4
organization
Neutral 14 13.7 13.7 95.1
Disagree 5 4.9 4.9 100
Total 102 100 100
The mission of the Strongly agree 39 38.2 38.2 38.2
organization is clearly stated Agree 51 50 50 88.2
in the strategic plan
Neutral 8 7.8 7.8 96.1
Disagree 4 3.9 3.9 100
Total 102 100 100
The strategic plan focuses on Strongly agree 38 37.3 37.3 37.3
ensuring quality service Agree 48 47.1 47.1 84.3
delivery and customer
satisfaction Neutral 11 10.8 10.8 95.1
Disagree 5 4.9 4.9 100
Total 102 100 100
The strategic plan considers Strongly agree 29 28.4 28.4 28.4
matching organizational Agree 36 35.3 35.3 63.7
structure, human and
financial resource with Neutral 22 21.6 21.6 85.3
organizational strategies. Disagree 14 13.7 13.7 99
Strongly disagree 1 1 1 100
Total 102 100 100
The strategic plan identified Strongly agree 22 21.6 21.6 21.6
current and future external Agree 43 42.2 42.2 63.7
challenges facing the
implementation process. Neutral 22 21.6 21.6 85.3
Disagree 13 12.7 12.7 98
Total 102 100 100
the weaknesses and strengths Agree 57 55.9 55.9 78.4
of the organization as well as
environmental opportunities Neutral 14 13.7 13.7 92.2
and threats. Disagree 6 5.9 5.9 98
Total 102 100 100

29
the current competitors Agree 44 43.1 43.1 66.7
capacity with internal
strength and weakness of the Neutral 26 25.5 25.5 92.2
organization. Disagree 6 5.9 5.9 98
Strongly disagree
2 2 2 100
Total 102 100 100
The strategic plan can build Strongly agree 32 31.4 31.4 31.4
planning team for a common Agree 36 35.3 35.3 66.7
vision.
Neutral 22 21.6 21.6 88.2
Disagree 12 11.8 11.8 100
Total 102 100 100
The strategic plan clearly Strongly agree 32 31.4 31.4 31.4
defines responsibility and Agree 39 38.2 38.2 69.6
accountability
Neutral 19 18.6 18.6 88.2
Disagree 10 9.8 9.8 98
Total 102 100 100
The strategic plan creates Strongly agree 25 24.5 24.5 24.5
positive communication Agree 42 41.2 41.2 65.7
among staffs
Neutral 21 20.6 20.6 86.3
Disagree 12 11.8 11.8 98
Strongly disagree
2 2 2 100
Total 102 100 100
The strategic plan allows Strongly agree 26 25.5 25.5 25.5
periodical review of the Agree 42 41.2 41.2 66.7
objective/goal
Neutral 23 22.5 22.5 89.2
Disagree 9 8.8 8.8 98
Strongly disagree
2 2 2 100
Total 102 100 100
The strategic plan has a Strongly agree 22 21.6 21.6 21.6
appropriate sequence and Agree 45 44.1 44.1 65.7
priority of goal convert to
implementation Neutral 25 24.5 24.5 90.2
Disagree 7 6.9 6.9 97.1
Strongly disagree
3 2.9 2.9 100
Total 102 100 100
30
The strategic plan is a good Strongly agree 22 21.6 21.6 21.6
marketing tool to promote Agree 51 50 50 71.6
the organizational service.
Neutral 17 16.7 16.7 88.2
Disagree 11 10.8 10.8 99
Strongly disagree
1 1 1 100
Total 102 100 100
The strategic plan is stated Strongly agree 26 25.5 25.7 25.7
in clear language and terms Agree 60 58.8 59.4 85.1
to understand easily.
Neutral 10 9.8 9.9 95
Disagree 4 3.9 4 99
Strongly disagree
1 1 1 100
Total 101 99 100
missing System 1 1
Total 102 100
Table 4.2 indicates, the statistical findings 33.3% of respondents strongly agreed the strategic
plan clearly identified the vision of the organization.48% of respondents agreed.13.7% of
respondents neutral from the strategic plan vision clear or not.4.9% of respondent disagreed
b y the vision of organizational strategic plan clarity.
38.2% of respondents strongly agreed the strategic plan mission was clearly stated. The
statistics indicates that half of respondents 50% agreed organizational mission clearly stated. This
indicates that the organization management and immediate supervisors couldn‟t create awareness
of organizational mission for all levels of employees. 7.8% of the respondents were neutral about
the strategic plan mission whether clearly stated or not.3.9% of respondents disagreed.
37% of respondents strongly agreed the strategic plan give emphasis to maximize quality service
and customer satisfaction. From the total respondents 47.1% of employees agreed the existence
of quality service and customer satisfaction with in the organization. 10.8% of respondents
neither agreed nor disagreed quality service and customer satisfaction found in the organization.
Only 4.9% of respondents disagreed existence of quality service and customer satisfaction in
the organization.
Strategic plan consider to matching organizational structure and resource with organizational
31
strategies 28.4% of the respondents strongly agreed by this statement. 35.3% of the respondents
agreed.21.6% of respondents have no idea. 13.7% of respondents disagreed. Only one respondent
strongly agreed.
As the statistical finding indicates that,21.6% of respondents strongly agreed strategic plan of
the organization identified challenges which existing external of the organization currently and in
the future period of time happens at the time of implementation process. Respondents 42.2% of
respondents agreed. 21.6% of respondents have no idea about the strategic plan identified
external current and future challenges that are affecting the implementation process or not.12.7%
of respondents disagreed. Only 2% of the respondents strongly disagreed.
Related to strategic plan consideration of weakness, strength, opportunities and threats, from
sample of this research 22.5% of respondents strongly agreed that strategic plan considered
internal and external environmental analysis of the organization. From the total of 102
respondents, majority of respondents 55.9% of employees agreed. This indicated that the
strategic plan of the organization had to minimize environmental risks and use opportunities.
13.7% of the respondents neither agreed nor disagreed. 5.9% of respondents disagreed and 2%
of the respondents strongly disagreed.
From the total of respondents 23.5% of employees strongly agreed the strategic plan consider
competitors capacity and internal environment of the organization. 43.1% of the respondents
agreed. 25.5% of the respondents do not have idea. 5.9% of the respondents disagreed. The
remaining 2% of respondents strongly disagreed.
31.4% of the respondents strongly agreed strategic plan contributed to build planning team for a
common vision for achievement of the organizational goals. 35.3 % of the respondents also
agreed. 21.6 % of the respondents neither agreed nor disagreed. The remaining 11.8% of the
respondents disagreed.
Respondents,31.4% employees strongly agreed their responsibility and accountability clearly
defined.38.2% of respondents agreed. 18.6% of respondents have no idea about their
responsibility and accountability provided clearly or not. 9.8% of respondents disagreed. The
other 2% of the respondents strongly disagreed clarity of their responsibility and accountability.
24.5% of respondents strongly agreed strategic plan creates positive communication among
staffs.41.2% of respondents agreed found positive communication within the organization. 20.6%
32
of respondents have no idea positive communication existence or not and 11.8% of the
respondents disagreed. The remaining 2% only strongly disagreed.
The total of respondents 25.5% of employees strongly agreed on openness of strategic plan of
the organization for periodical review. Respondents 41.2% agreed. The respondents 22.5% of
employees do not have idea the strategic plan of the organization allowed periodical review or
not. 8.8% of the respondents disagreed. The remaining 2 % o f respondents strongly disagreed.
The strategic plan had appropriate sequence and priority goal when convert to implementation,
the respondent 21.6% of employees strongly agreed. 44.1% of respondents agreed. 24.5% of
respondents do not have information. 6.9% of the respondents disagreed. The remaining 2.9% of
respondents strongly disagreed.
From the total of 102 respondents 21.6% of employees strongly agreed the strategic plan
contributed as a marketing tool. Half of the respondents agreed. 16.7% of respondents do not
have idea.10.8% of respondents not accepted. One respondent only strongly disagreed.
25.7% of respondents strongly agreed strategic plan language and terms clearly stated.59.4% of
employees agreed. This shows that majority of employees understand the strategic plan
easily.9.9% of respondents do not have idea about the strategic plan easily understandable or not.
4% of respondents disagreed. The remaining only one respondent strongly disagreed.
Summary of opinion result: the question 1, How to evaluate the soundness of strategic plan in
your bank? There are a lot activities involved to check the soundness of the organization
strategic plan like: internal and external environment analysis , to check focused area included in
the strategic plan: deposit mobilization and collection of FCY, and does the two pillars of the
organization: operational excellence and business growth considered, to check required human
and non human resources, the strategic plan to be realistic because these are the major activities
of the organization seeks to achieved.
4.3 Strategic planning formulation process in CBE
In this section, to describe factors that are consider at the time of formulation process of SP. Such
as: to identify the realistic of strategic plan ,does CBE revised and updated its mission, required
resource, analysis of environmental situation, availability of integrated PMS, the degree of
attention in focused and concrete area, and to assess the level of employees participation of
strategic plan formulation process.
33
Table 4.3 Strategic planning formulation process in CBE
Formulation of Degree of Valid Cumulative

strategic plan Agreement Frequency Percent Percent Percent
There are clear policy Strongly agree 29 28.4 28.4 28.4
and procedures to Agree 47 46.1 46.1 74.5
formulate strategic
Neutral 13 12.7 12.7 87.3
planning in CBE
Disagree 11 10.8 10.8 98
Strongly
disagree 2 2 2 100
Total 102 100 100
While formulating Strongly agree 20 19.6 19.6 19.6
strategic planning, Agree 44 43.1 43.1 62.7
organizational missions
Neutral 23 22.5 22.5 85.3
are revised and updated
in light of changes Disagree 11 10.8 10.8 96.1
Strongly disagree 4 3.9 3.9 100
Total 102 100 100
The human and non- Strongly agree 25 24.5 24.5 24.5
human resources of the Agree 41 40.2 40.2 64.7
organization are taken
Neutral 19 18.6 18.6 83.3
to consideration in
order to set a realistic Disagree 12 11.8 11.8 95.1
and achievable goal Strongly disagree 5 4.9 4.9 100
Total 102 100 100
The process of Strongly agree
formulating strategic 26 25.5 25.5 25.5
planning involves Agree 42 41.2 41.2 66.7
assessment of external Neutral 21 20.6 20.6 87.3
environmental Disagree 10 9.8 9.8 97.1
situations to analysis Strongly
possible threats and disagree 3 2.9 2.9 100
opportunities
Total 102 100 100
The formulation Strongly agree 25 24.5 24.5 24.5
process considers the Agree 43 42.2 42.2 66.7
need for integrated
Neutral 24 23.5 23.5 90.2
performance
management system Disagree 8 7.8 7.8 98
required to implement Strongly disagree 2 2 2 100
the strategic plan Total 102 100 100
34
In the process of Strongly agree 30 29.4 29.4 29.4
formulating strategic Agree 48 47.1 47.1 76.5
planning, core focus
Neutral 13 12.7 12.7 89.2
areas have been clearly
identified Disagree 7 6.9 6.9 96.1
Strongly
disagree 4 3.9 3.9 100
Total 102 100 100
Appropriate action plan Strongly agree 24 23.5 23.5 23.5
to convert the general Agree 42 41.2 41.2 64.7
strategic plan in the
Neutral 23 22.5 22.5 87.3
concrete activities are
clearly identify Disagree 9 8.8 8.8 96.1
Strongly
disagree 4 3.9 3.9 100
Total 102 100 100
The human resource Strongly agree 23 22.5 22.5 22.5
required to implement Agree 50 49 49 71.6
the strategies are
Neutral 17 16.7 16.7 88.2
considered in
formulation process Disagree 10 9.8 9.8 98
Strongly
disagree 2 2 2 100
Total 102 100 100
Employees are actively Strongly agree 23 22.5 22.5 22.5
involved in the process Agree 27 26.5 26.5 49
of formulating strategic
Neutral 15 14.7 14.7 63.7
plan
Disagree 25 24.5 24.5 88.2
Strongly
disagree 12 11.8 11.8 100
Total 102 100 100

From the total of respondents 28.4% of the employees strongly agreed that the existence of
clear policy and procedure within the organization at the time of SP formulation process.
Respondents 46.1% of employees agreed strategic plan contains clear policy and procedures.
12.7% of respondents do not have idea the strategic plan carries whether clear policy and
procedure or not. 10.8% of respondents disagreed. The remaining 2% of respondents strongly
disagreed. From the total of 102 respondents, 19.6% of employees strongly agreed that at the
time of strategic plan formulation, the mission of the organization revised and updated. 43.1% of
35
respondents agreed. 22.5% of the respondents do not have information whether the mission of
the organization revised and updated during the formulation process or not. 10.8% of
respondents disagreed. The remaining 3.9% of respondents strongly disagreed.
As table 4.3 indicates that 24.5% of respondents strongly agreed the strategic plan formulation
considers organizational resource in order to set realistic and achievable goal.40.2% of
respondents agreed. 18.6% of the respondents were neutral.11.8% of respondents disagreed
and the remaining 4.9% of respondents strongly disagreed.
The total respondents of the study,25.5% of employees strongly agreed the process of
formulating strategic plan involves assessment of external environmental situation to analyze
possible threat and opportunities. 41.2%of respondents agreed. On the other hand, 20.6% of
respondents do not have idea.9.8% of respondents disagreed. The remaining 2.9% of the
Based on the sample respondents of the research, 24.5% of the employees strongly agreed that the
formulation process of the strategic plan considered integrated PMS. 42.2% of respondents
agreed. 23.5% respondents do not have information.7.8% of respondents disagreed and the
remaining 2% of respondents strongly disagreed.
29.4% of the respondents strongly agreed the existence of focused area of the organization clearly
identified.47.1% of respondents agreed.12.7% of respondents do not have idea.6.9% of
respondents disagreed and 3.9% of respondents strongly disagreed.
The total of respondents 23.5% of employees strongly agreed the availability of appropriate action
plan helped to convert general SP to concrete activities clearly identified. 41.2 % of the
respondents agreed. 22.5% of the respondents do not have idea. 8.8% of respondents disagreed
and the remaining 3.9 % of respondents strongly disagreed.
22.5% of respondents strongly agreed the human resource requirement considered at the time of
SP of formulation process. The respondents 49% of employees agreed .16.7% of respondents
have no idea. 9.8% of the respondents disagreed. 2% of respondents strongly disagreed.
The total of 102 sample respondents 22.5% of employees strongly agreed they were actively
participated the SP formulation process. 26.5% of respondents agreed.14.7% of the respondents
do not have idea whether they should involved the strategic plan formulation process or
not.24.5% of respondents disagreed. The remaining 11.8% of the respondents strongly disagreed.
36
Examining finding of research interview, question 2, what were the major practices to consider
the formulation process of strategic plan in your bank? when at the time formulation process of
strategic plan activities done like to identify external and internal environmental analysis ,to
check the bank capacity, organizational structure and resource based view measurement
,governmental policy, risk ,information system of the bank, marketing & sales organ
,effectiveness & efficiency level of the organization, strictly focused areas to formulate properly ,
this information from the side of OSM. On the other hand branches also give information at
the time of strategic plan formulation process like :report their performance based on previous
quarter or last year trend related to their success and challenges and proposed operational
activities, the level of deposit, number of base customer ,E- payment(Mobile banking, Internet
banking, ATM,CBE birr), FCY, their expense & collection of service charge ,and Human
resource plan .
4.4 Achievement of strategic plan in CBE
This section, describes that the level of achievement existed within the organization: better
implementation of mission and vision, financial sustainability, improvement of service quality &
customer satisfaction, employees job satisfaction, improvement of skill gap, to maintain
competitive advantage through to promote new service innovation, achievement of priority areas
of the organization, to build trust with customers, and to improve internal environment situation.
Table 4.4 Achievement of strategic plan in CBE
Achievement of Degree of Valid Cumulative

Strategic plan Agreement Frequency Percent Percent Percent
The implementation
Strongly agree 39 38.2 38.2 38.2
strategic plan helped the
organization (CBE) to Agree 46 45.1 45.1 83.3
better achieve its mission
Neutral 10 9.8 9.8 93.1
and vision
Disagree 7 6.9 6.9 100
Total 102 100 100 100
It helped the bank to
adequately ensure
financial sustainability Agree 57 55.9 55.9 86.3
and soundness Neutral 9 8.8 8.8 95.1
Disagree 5 4.9 4.9 100
Total 102 100 100 100
37
The implementation of
strategic plan
significantly contributed Agree 48 47.1 47.1 81.4
to improving service
Neutral 9 8.8 8.8 90.2
quality and customer
satisfaction Disagree 10 9.8 9.8 100
Total 102 100 100 100

The implementation of
strategic plan
significantly contributed Agree 37 36.3 36.3 53.9
to improving employees‟
Neutral 12 11.8 11.8 65.7
job satisfaction
Disagree 24 23.5 23.5 89.2
Total 102 100 100 100
To improve staff skill
gaps through training and
immediate of supervisor Agree 45 44.1 44.1 60.8
couch
Neutral 21 20.6 20.6 81.4
Disagree 15 14.7 14.7 96.1
Total 102 100 100 100
maintain competitive
advantage and Agree 44 43.1 43.1 63.7
sustainability through
Neutral 22 21.6 21.6 85.3
new service innovation
Disagree 13 12.7 12.7 98
Strongly
2 2 2 100
disagree
Total 102 100 100 100
better meet its goals in
priority areas like deposit Agree 56 54.9 54.9 86.3
mobilization and
Neutral 7 6.9 6.9 93.1
collection of foreign
currency Disagree 4 3.9 3.9 97.1
Total 102 100 100 100
38
It significantly
contributed in build trust
with customers Agree 51 50 50 81.4
Neutral 14 13.7 13.7 95.1
Disagree 3 2.9 2.9 98
Strongly disagree 2 2 2
Total 102 100 100 100

It helped the organization
to minimize its internal
weaknesses and maintain Agree 47 46.1 46.1 73.5
its strengths
Neutral 18 17.6 17.6 91.2
Disagree 6 5.9 5.9 97.1
Total 102 100 100 100

Table 4.4 indicates that,38.2% of the respondents strongly agreed that the success of strategic plan
mission and vision supported by a good implementation process of the organization. 45.1% of
respondents agreed. 9.8% of the respondents have no information and remaining 6.9% of
respondents disagreed.
The total of respondents 30.4% of employees strongly agreed that the achievement of strategic
plan helped the organization to adequately ensure financial sustainability and soundness. Majority
of respondents 55.9% agreed. This shows that the organization effort towards financial
strengthens helped to maintain competitive advantage and customer satisfaction. Whereas
8.8%of respondents have no idea and the remaining 4.9% of respondents disagreed.
The total of respondents 34.3% of employees strongly agreed the implementation of strategic plan
significantly contributed to improving service quality and customer satisfaction.47.1%of
respondents agreed.8.8% of respondents do not have information. 9.8% of respondents disagreed.
17.6% of respondents strongly agreed the strategic plan of the organization helped to improves
the level of employees job satisfaction. 36.3% of respondents agreed. 11.8% of respondents
do not have idea about strategic plan of the organization had contribution of employees job
satisfaction or not. 23.5% of respondents disagreed and the remaining 10.8% of respondents
39
strongly disagreed.
On the existence of strategic plan of the organization improves skill gap of employees through
training and supervisors couch 16.7% respondents strongly agreed. 44.1% of respondents
agreed. 20.6% of respondents have no idea. 14.7% of respondents disagreed. 3.9% of respondents
strongly disagreed.
The total respondents 20.6% of employees strongly agreed the strategic plan maintain competitive
advantage and sustainability of the organization through innovation of new service.43.1% of the
respondents agreed. 21.6% of respondents have no idea. 12.7% of respondents contrary disagreed
and the remaining 2% of respondents strongly disagreed.
31.4% of the respondents strongly agreed that the strategic plan of the organization helped to
achieve priority areas of the organization: deposit mobilization and collection of FCY.54.9%
respondents agreed. This shows that majority of employees understand priority areas of the
organization. 6.9% of respondents have no clear information of priority areas of the
organization. 3.9% of respondents disagreed and the remaining 2.9% of respondents strongly
disagreed.
As indicates the finding 31.4% of respondents strongly agreed strategic plan of the organization
build trust with customers. Half of the respondents agreed. 13.7% of respondents have no idea.
This shows that all staffs of the organization do not have information does customers trust found
in the bank or not. 2.9% of respondents disagreed and the remaining 2% of respondents strongly
disagreed.
The total respondents 27.5% of employees strongly agreed the strategic plan of the organization
was appropriate to improve internal weakness and maintain strength of the organization. 46.1% of
the respondents agreed. 17.6% of the respondents have no idea. 5.9% of respondents
disagreed.2.9% of respondents strongly disagreed.
The third findings answer question 3,how to evaluate the achievement of strategic plan of your
bank? As the table 4.4 indicated of questionnaire analysis & interview findings shows that
availability of better achievement of strategic measured by all activities of the organization
implemented and achieved successfully ,achievement of vision and mission, ensuring financial
soundness improving employees job satisfaction and maximizing customers satisfaction ,to
improve employees skill gap ,maintain competitive advantage ,to meet the goal on priority areas:
40
deposit mobilization and collection of FCY and to build trust with customers generally ,to
achieve operational excellence and business growth of the organizational goal.
4.5 Challenges faced implementation of strategic plan in CBE
This section, examines the challenges that are affecting achievement of SP at the time of
implementation : unrealistic and difficult to implement, problem of communication and
understanding of SP among staffs, poor employees commitment and motivation, resistance to
accept the strategic plan, lack of proper organizational structure, required training, and proper
PMS, inadequate couching of supervisors to employees, inconsistence of standard service
delivery time and quality service commitment, problem of connection, electricity and
telecommunication, inappropriate alignment of staffs and problem related to collection of FCY.
Table 4.5 Challenges faced implementation of strategic plan in CBE
Challenges of strategic Degree of Valid Cumulative

plan Agreement Frequency Percent Percent Percent
The strategic plan is Strongly agree 7 6.9 6.9 6.9
unrealistic and difficult to Agree 22 21.6 21.6 28.4
implement
Neutral 21 20.6 20.6 49
Disagree 41 40.2 40.2 89.2
Strongly disagree 11 10.8 10.8
Total 102 100 100 100
Problem of communication Strongly agree 7 6.9 6.9 6.9
and understanding of the Agree 35 34.3 34.3 41.2
strategy plan among staff
Neutral 29 28.4 28.4 69.6
Disagree 27 26.5 26.5 96.1
Strongly
disagree 4 3.9 3.9
Total 102 100 100 100
Poor employee‟s Strongly agree 11 10.8 10.8 10.8
commitment and motivation Agree 24 23.5 23.5 34.3
to achieve strategic plan
Neutral 24 23.5 23.5 57.8
Disagree 32 31.4 31.4 89.2
Strongly
disagree 11 10.8 10.8
Total 102 100 100 100
41
Staff resistance to accept Strongly agree 7 6.9 6.9 6.9
strategic plan Agree 27 26.5 26.5 33.3
Neutral 22 21.6 21.6 54.9
Disagree 35 34.3 34.3 89.2
Strongly
11 10.8 10.8
disagree
Total 102 100 100 100
Lack of proper Strongly agree 11 10.8 10.8 10.8
organizational structure to Agree 26 25.5 25.5 36.3
implement the strategic plan
Neutral 26 25.5 25.5 61.8
Disagree 26 25.5 25.5 87.3
Strongly
disagree 13 12.7 12.7
Total 102 100 100 100
Lack of training and Strongly agree 11 10.8 10.8 10.8
resources (human & non- Agree 33 32.4 32.4 43.1
human) required to
Neutral 11 10.8 10.8 53.9
implement the plan
Disagree 33 32.4 32.4 86.3
Strongly
14 13.7 13.7
disagree
Total 102 100 100 100
Inadequate couching Strongly agree 10 9.8 9.8 9.8
provided to employees by Agree 33 32.4 32.4 42.2
immediate supervisors
Neutral 20 19.6 19.6 61.8
during the course of
strategic plan Disagree 29 28.4 28.4 90.2
implementation Strongly disagree 10 9.8 9.8
Total 102 100 100 100
Lack of proper performance Strongly agree 15 14.7 14.7 14.7
management systems to Agree 40 39.2 39.2 59.9
evaluate the progress and
Neutral 17 16.7 16.7 70.6
achievement of strategic
plan Disagree 23 22.5 22.5 93.1
Strongly
7 6.9 6.9
disagree
Total 102 100 100 100
Inconsistency of standard Strongly agree 17 16.7 16.7 16.7
service delivery time and Agree 33 32.4 32.4 49
quality service commitment
Neutral 22 21.6 21.6 70.6
Disagree 26 25.5 25.5 96.1
Total 102 100 100 100
42
Problem of network Strongly agree 43 42.2 42.2 42.2
connection Agree 36 35.3 35.3 77.5
Neutral 12 11.8 11.8 89.2
Disagree 10 9.8 9.8 99
Total 102 100 100 100
Lack of adequate time Strongly agree 11 10.8 10.8 10.8
convert strategic plan in to Agree 31 30.4 30.4 41.2
action
Neutral 32 31.4 31.4 72.5
Disagree 22 21.6 21.6 94.1
Total 102 100 100 100
Problem of power supply Strongly agree 39 38.2 38.2 38.2
interruption and Agree 40 39.2 39.2 77.5
telecommunication
Neutral 10 9.8 9.8 87.3
Disagree 7 6.9 6.9 94.1
Total 102 100 100 100
Lack of prioritizing efforts Strongly agree 11 10.8 10.8 10.8
and determining the timing, Agree 33 32.4 32.4 43.1
sequence and resources
Neutral 34 33.3 33.3 76.5
required to successfully
accomplish Disagree 22 21.6 21.6 98
Total 102 100 100 100
Inappropriate Strongly agree 24 23.5 23.5 23.5
aligning/assignment of the Agree 33 32.4 32.4 55.9
right person to right place
Neutral 27 26.5 26.5 82.4
Disagree 17 16.7 16.7 99
Total 102 100 100 100
The malpractice prevailing Strongly agree 43 42.2 42.2 42.2
in the financial market (such Agree 26 25.5 25.5 67.6
as informal foreign currency
Neutral 14 13.7 13.7 81.4
purchase, transfer and
export of currency) Disagree 14 13.7 13.7 95.1
negatively affect Strongly disagree 5 4.9 4.9
achievement strategic plan Total 102 100 100 100

43
As table 4.5 indicates that the total of 102 respondents 6.9% of employees strongly agreed
the strategic plan was unrealistic and difficult to implement easily. 21.6% of the respondents
agreed. 20.6% of respondents have no idea about does the strategic plan of the organization
unrealistic and difficult to implement or not. On the other hand 40.25 of employees
disagreed. And 10.8% of the respondents strongly disagreed.
6.9% of respondents strongly agreed existence of communication and understanding of
strat egic plan problem among staffs. Respondents 34.3% of employees agreed. 28.4% of
respondents have no information. 26.5% of the respondents disagreed and the remaining 3.9%
of the respondents strongly disagreed.
10.8% of respondents strongly agreed that poor commitment and motivation of employees the
cause of unachievable of SP.23.5% of the respondents disagreed. Similarly 23.5% of
respondents have no idea. 31.4% of respondents disagreed. The remaining 10.8% of
6.9% of respondents strongly agreed by existence of staff resistance accepting strategic plan of
the organization.26.5% of the respondents agreed.21.6% of respondents have no idea.34.3% of
respondents disagreed. 10.8% of respondents strongly disagreed.
The total of respondents 10.8% of employees strongly agreed lack of proper organizational
structure was an obstacle to achieve SP. 25.5% of respondents agreed. Similarly, 25.5% of
respondents have no information whether the organizational structure good or not. Again
25.5% of the respondents disagreed. The remaining 12.7% of respondents strongly disagreed.
10.8% of respondents strongly agreed the existence of lacks training and required non human
resources in order to achieve organizational goal. 32.4% of the respondents agreed.10.8% of
respondents have no idea. On the contrary, 32.4% of the respondents disagreed and the
remaining 13.7% of the respondents strongly disagreed.
Respondents 9.8% of employees strongly agreed during the course of strategic plan
implementation existence of inadequate immediate supervisors coaching to employees.32.4% of
respondents agreed. 19.6% of respondents have no idea. 28.4% of respondents disagreed. And
the remaining 9.8% of the respondents strongly disagreed.
44
The total of respondents 14.7% of employees strongly agreed the organization lacks proper PMS
helped to evaluate its progress and achievement of organizational goals. Respondents 39.2%
agreed. 16.7% of respondents have no idea.22.5% of respondents disagreed and the
remaining 6.9% of respondents strongly disagreed.
Inconsistency of standard service delivery time and quality service commitment existence of the
organization 16.7% of respondents strongly agreed.32.4% of respondents agreed .21.6% of the
respondents have no idea. 25.5% of the respondents disagreed and the remaining 3.9% of the
From the total of respondents 42.2% of employees strongly agreed network connection
problem affects achievement of strategic plan.35.3% of the respondents agreed. 11.8% of
respondents have no idea either connection problem affect strategic plan success or not. 9.8% of
respondents disagreed and the remaining one respondent only strongly disagreed .
10.8% of respondents strongly agreed lack of adequate time convert strategic plan in to action
found in the organization. Respondents 30.4% of employees agreed. 31.4% of respondents have
no idea about the problem.21.6% of respondents disagreed.5.9% of respondents strongly
disagreed.
The total of respondents 38.2% of the employees strongly agreed electricity and
telecommunication problem affected the success of organizational goal. 39.2% of respondents
agreed. 9.8% of respondents have no idea. 6.9% of respondents disagreed by this problem as
an obstacle f o r strategic plan achievement of the organization.5.9% of the respondents
strongly disagreed.
10.8% of respondents strongly agreed lack of prioritizing activities, time, sequence and required
resources affected the strategic plan success of the bank. 32.4% of the respondents agreed.33.3%
of the respondents have no idea. 21.6% of respondents disagreed and the remaining 2% of
respondents strongly disagreed .
Total of 23.5% respondents strongly agreed existence of inappropriate employees aligning .From
the total of respondents 32.4% of respondents agreed.26.5% of respondents have no idea does
the right person assign the right place or not. 16.7% of respondents disagreed and the remaining
one respondent only strongly disagreed.
45
From the total of 102 respondents 42.2% of employees strongly agreed FCY affects
achievement of organizational strategic plan.25.5% of respondents agreed. 13.7% of
respondents have no idea and similarly, 13.7% of respondents disagreed. The remaining 4.9%
of respondents strongly disagreed.
The forth interview findings provided the answer to research interview question 4, what are the
major challenges that are really affecting strategic plan achievement in your bank? As table
4.5 indicates and interview findings provided that there are a number of challenges that are
affected the strategic plan achievement such as: power supply, telecommunication and network
problem ,inconsistence of service delivery time, inappropriate organizational structure,
availability HR skill gap ,existence of mal practices ,are the major challenges affecting strategic
plan.
46
CHAPTER FIVE
5. Summary of major Findings, Conclusion and Recommendation

5.1 Summary of major findings
Based on the valid percent of respondents of their level of agreement the summary of major
findings are presented as follows:
Half of the respondents believed that the mission of the organization clearly stated based on the
level of employees understanding. 55.9% of respondents agreed the strategic plan of the
organization made SWOT analysis to minimize risk and maintain and use strength and
opportunities. The strategic plan of the organization promotes bank‟s service as a good
marketing tool. Majority of respondents, 55.8% of employees understand easily the SP of the
organization.
55.9% of employees of the organization accepted the Sp helped to ensure financial sustainability
and soundness of the bank. 49% of employees believed that the SP considered required HR for
implementing the plan. Half of the organization employees accepted that strategic plan of the
bank contributed to build trust with customers.
40.2% of employees not accepted the statement of organizational plan unrealistic and difficult to
implement. Existence of communication and understanding of the strategic plan problem,34.3%
of employees agreed. After the strategic plan formulates and forward for implementation most of
organizational staff accepted. 39.2% of the respondents agreed lack of proper PMS to evaluate
the progress and achievable of the strategic plan. 42.2% of the organization employees accepted
the problem of network connection existed in the bank.39.2% of the respondents agree the
problem of power supply and telecommunication are affecting the organization strategic plan
achievement.42.2% of employees believed that the problem of FCY availability in the bank
affects the strategic plan of the organizational success.
47
5.2 Conclusion
The aim of this study to assess the process, success and implementation challenges of the
strategic planning of Commercial Bank of Ethiopia. The study was used were used mixed
approach (quantitative and qualitative). Primary and secondary sources are used. The primary
source was by using questionnaires and interview from north Addis Ababa district grade 3,4 and
special branches and secondary data collected from books, internet and bank‟s website. After the
data collected analyzed, interpreted and discussed by using SPSS 20 version software.
Based on the findings of the study, the researcher make conclusion as follows:-
The strategic plan of the organization clearly and easily understands among majority of the
employees.
Financial sustainability and soundness of the bank ensures through human and non-human
resources consider in the formulation process of the strategic plan of the bank.
All level of organizational employees are not actively participated in the process of strategic
plan of the organization.
The integrated PMS of the bank doesn‟t ensure to identify the progress and level of success
of each and every individual employee.
Majority of employees believed that the bank considers its risk and maintain opportunities
and strengths at the time of strategic plan formulation process.
5.3 Recommendation
In order to improve the strategic plan soundness and easily achieved based on the time
bound, the organization should actively participate all levels of employees helped to gather
relevant information for formulation process and implementation challenges.
The bank should practice active immediate supervisors coaching of employees to upgrade
their information of strategic plan and adapted their day to day activities properly done.
48
To achieve integrated PMS timely, the management should set better performance system
practices for individuals helped to evaluate and identified their work progress and skills.
Inconsistence of standard service delivery time and quality service creates customer
dissatisfaction. To improve this dissatisfaction ,CBE should investigate the real causes of the
problem and setting realistic standardization of service delivery time and quality service
measurement.
Network connection was the major challenges of the organization. To eliminate this problem,
the top management negotiated with telecommunication responsible persons and to build
additional network system by its own expense.
Lack of prioritize efforts and determine time, sequence and resources, creates unsuccessful
organizational goal. In order to improve this problem, the management clearly identified the
priority areas and creates awareness among all levels of employees properly.
In order to minimize FCY problem of the bank, the bank tries to increase buying rate of
different currencies negotiating with National bank of Ethiopia relatively equivalent to black
market, to develop different benefit packages for exporters and attract to the bank work
together in order to collect foreign currency, similarly negotiated with different non-
governmental organizations to received their foreign fund through CBE.
5.4 Recommendations for Further Studies

This study was focused on only one district and a department of head quarter commercial bank
Ethiopia. I recommend a survey on a number of other districts and departments under head office
in order to make a clear comparison and to provide better conclusion.
49
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52
Appendix
ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF PUBLIC ADMINISTRATION AND DEVELOPMENT
MANAGEMENT
MASTERS OF PUBLIC MANAGEMENT AND POLICY (MPMP) PROGRAM
Questionnaire to be filled by respondents
Dear Respondents,
I am a master‟s program student at Addis Ababa University, department of Public Administration

and Development Management. This questionnaire is prepared for research purpose entitled
“ Assessment of the Process, Success and Challenges of Strategic Planning in Commercial
Bank of Ethiopia”. I am kindly requesting you to assist me by filling the questionnaire to the
best of your knowledge.
Please be assured that the information you provide will be used only for academic purposes and
your responses will be confidential.
Selamawit Guanche
Student Researcher
Please contact me for any inconvenience

Email: [email protected]
Mobile No: +251911150485
Thank you very much in advance for your time.
SECTION I: General Information

1. Name of the respondent (optional) ______________________
2. Gender: Male ( ) Female ( )
53
3. Age:
a. Below 25 years ( )
b. 26 –35 years ( )
c. 36 – 45 years ( )
d. 46 – 55 years ( )
e. Over 55 years ( )
4. Marital Status:
a. Single( )
b. Married( )
c. Divorced( )
d. Widow/ widower( )
5. Academic qualifications:
a. Diploma ( ) b. Degree ( ) c. Master‟s degree ( ) d. PhD ( ) e. Any other (specify)__________
6. How long have you been in this organization?
a. Less than 5 years ( )
b.5 – 8 years ( )
c.9 – 11years ( )
d.12 –15 years ( )
e. Over 16 years ( )
7. Your position in the bank: a. Managerial b. non-managerial
8.If you are a manager, how long have you been stay at managerial level?
a. 1 – 5 years ( )
b.6 – 10 years ( )
c.11 – 15years ( )
d.16 –20 years ( )
e. Above 20 years ( )
9. Your Department (Optional) _____________________
54
Section II: Extent of Realistic of Strategic Plan in Commercial Bank of Ethiopia (CBE)
S/N Items
Disagree
Disagree
Strongly
Strongly
Neutral
Agree
Agree
1 The strategic plan clearly identifies the vision of the organization.
2 The mission of the organization is clearly stated in the strategic plan.
3 The strategic plan focuses on ensuring quality service delivery and
customer satisfaction.
4 The strategic plan considers matching organizational structure, human and
financial resource with organizational strategies.
5 The strategic plan identified current and future external challenges facing
the implementation process.
6 The strategic plan considers the weaknesses and strengths of the
organization as well as environmental opportunities and threats.
7 The strategic plan considers the current competitors capacity with internal
strength and weakness of the organization.
8 The strategic plan can build planning team for a common vision.
9 The strategic plan clearly defines responsibility and accountability.
10 The strategic plan creates positive communication among staffs.
11 The strategic plan allows periodical review of the objective/goal.
12 The strategic plan has appropriate sequence and priority of goal convert to
implementation.
13 The strategic plan is a good marketing tool to promote the organizational
service.
14 The strategic plan is stated in clear language and terms to understand
easily.
15. If you have any additional opinion regarding the soundness of strategic plan in CBE,
Please specify-------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
55
SECTION III: Strategic Planning Formulation Process in CBE
S/N Items
Disagree
Disagree
Strongly
Strongly
Neutral
Agree
Agree
16 There are clear policy and procedures to formulate strategic planning in CBE.
17 While formulating strategic planning, organizational missions are revised and
updated in light of changes.
18 The human and non-human resource of the organization are taken to
consideration in order to set a realistic and achievable goal.
19 The process of formulating strategic planning involves assessment of external
environmental situations to analysis possible threats and opportunities.
20 The formulation process considers the need for integrated performance
management system required to implement the strategic plan.
21 In the process of formulating strategic planning, core focus areas have been
clearly identified.
22 Appropriate action plan to convert the general strategic plan in to concrete
activities are clearly identified.
23 The human resource required to implement the strategies are considered in
formulation process.
24 Employees are actively involved the process of formulating strategic plan.
25. If you have any additional opinion strategic plan formulation process in CBE,
Please specify-----------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
---------------------------------------------------------------------------------
56
SECTION IV: Achievements of Strategic Plan in CBE
S/N Items
Disagree
Disagree
Strongly
Strongly
Neutral
Agree
Agree
26 The implementation strategic plan helped the organization (CBE) to
better achieve its mission and vision.
27 It helped the bank to adequately ensure financial sustainability and
soundness.
28 The implementation of strategic plan significantly contributed to
improving service quality and customer satisfaction.
29 The implementation of strategic plan significantly contributed to
improving employees‟ job satisfaction.
30 To improve staff skill gaps through training and immediate of
supervisor couch.
31 It helped the bank to maintain competitive advantage and
sustainability through new service innovation.
32 It helped the bank to better meet its goals in priority areas like deposit
mobilization and collection of foreign currency.
33 It significantly contributed in build trust with customers.
34 It helped the organization to minimize its internal weaknesses and
maintain its strengths.
35. If you have any additional opinion achievement of strategic plan in CBE,
Please specify-----------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
---------------------------------------------------------------------------------
57
SECTION V: Challenges faced implementation of Strategic plan in CBE
S/N Items
Disagree
Disagree
Strongly
Strongly
Neutral
Agree
Agree
36 The strategic plan is unrealistic and difficult to implement.
37 Problem of communication and understanding of the
strategy plan among staff.
38 Poor employee‟s commitment and motivation to achieve
strategic plan.
39 Staff resistance to accept strategic plan.
40 Lack of proper organizational structure to implement the
strategic plan.
41 Lack of training and resources (human & non-human)
required to implement the plan.
42 Inadequate couching provided to employees by immediate
supervisors during the course of strategic plan
implementation.
43 Lack of proper performance management systems to
evaluate the progress and achievement of strategic plan.
44 Inconsistency of standard service delivery time and quality
service commitment.
45 Problem of network connection.
46 Lack of adequate time convert strategic plan in to action.
47 Problem of power supply interruption and
telecommunication.
48 Lack of prioritizing efforts and determining the timing,
sequence and resources required to successfully
accomplish.
49 Inappropriate aligning/assignment of the right person to
right place.
50 The malpractice prevailing in the financial market (such as
informal foreign currency purchase, transfer and export of
currency) negatively affect achievement strategic plan.
51. If there are additional challenge that you believe negatively affects the
success of strategic plan in CBE, please specify. ----------------------------------
---------------------------------------------------------------------------------------------
---------------------------------------------
Thank you for your cooperation!

58

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Addis Ababa University

College of Business and Economics

Assessment of the Process, Success and Challenges of Strategic

Addis Ababa, Ethiopia

Assessment of the Process, Success and Challenges of Strategic

Advisor: Gemechu Ararsa (PhD)

A thesis submitted to the Department of Public Administration and

Addis Ababa, Ethiopia

Challenges of Strategic Planning in Commercial Bank of Ethiopia”, is my original work

Declared by: Confirmed by Advisor:

Name: Selamawit Guanche Name: Gemechu Ararsa(PhD)

Approved by Board of Examiners:

1.7. Scope of the Study ................................................................................................................ 5

2.6. Implementing a strategy successfully ..............................................................................18

3.4.1. Target population................................................................................................... 23

CHAPTER FOUR ...................................................................................................................... 26

Table 3.1: Sample determination……………...................................................................................... 24

CBE= Commercial Bank of Ethiopia

Key words: Strategic Plan, Challenges, Formulation Process, Success

1.2 Background of the Organization

VISION: To become a world-class commercial bank by the year 2025.

1.3 Statement of the Problem

1.4 Research Questions

1.5 Objective of the Study

1.6 Significance of the Study

1.7 Scope of the Study

1.9 Organization of the study

2.Review of Related Literature

2.2 Strategy planning

2.3 Strategic Management

2.4 Strategy Formulation

2.5 The nature of Strategy Implementation

Role of structure and systems in strategy implementation

Skills and staff for strategy implementation

Role of performance evaluation and reward system

2.6 Who Implements Strategy?

2.8 Strategic challenges

2.9 Empirical Review

3.1 Research Approach

3.2 Data Sources

3.3 Data Collection Methods

3.4 Sampling Techniques

3.4.2 Sampling Method

Table 3.1: Sample size determination

Population size Small Medium Large

1200-3200 50 125 200

3021-10000 80 200 315

10,001-35,000 125 315 500

35001-150,000 200 500 800

Source :Carvalho (1984)

3.6 Ethical Consideration

4.1 General information of Respondents

Less than 5 years 58 56.9 56.9 56.9

Managerial 13 12.7 12.7

Source: The research survey,2018

Last element general information of respondents was department. Department of strategic

4.2 Realistic of strategic plan in commercial Bank of Ethiopia (CBE)

Degree of Valid Cumulative

Total 102 100 100