Assessing the role of strategic management in boosting organizational performance: Evidence from the banking sector

The complexities of the contemporary business landscape have given rise to a set of factors that have had a profound impact on the performance of institutions. Therefore, organizations encounter serious challenges in their efforts to adapt to the quickening speed and heightened complexity of environmental, social, political, and economic transformations. Strategic management is vital for managing the complexity of the business environment, integrating a variety of disciplines, and addressing contemporary challenges. Like any other organization, banks are continually influenced by changes, which affect their performance. Therefore, banks’ performance and ability to sustain competitiveness critically depend on the effective adoption of strategic management practices. This research evaluates how strategic management affects performance in the Yemeni banking sector. This study focuses on assessing the role of strategic management practices, namely, strategic objectives, environmental analysis, and the management of change, on the performance of banks in Yemen. A quantitative research approach is used to investigate a population of 1525 individuals with supervisory positions in the 10 Yemeni banking sector. A questionnaire was developed and administered to a sample of 312 participants, and the data collected were analyzed via SmartPLS. The study results revealed a positive relationship between strategic management and organizational performance. The results of this research provide clear insight into the theoretical framework corresponding to the topic by integrating the effects of strategic management on organizational performance. Decision-makers in banks can use study results to recognize that better performance outcomes are associated with greater concern for strategic management.