Volume: 19 Issue-01 (January-June) 2024

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STRATEGIC MANAGEMENT AND FINANCIAL EFFICIENCY: A SYNERGISTIC APPROACH FOR BANKS

ABSTRACT

This article explores the intricate relationship between strategic management and financial efficiency in the banking sector. Strategic management, with its focus on setting objectives, analysing internal and external environments, and implementing strategies, plays a pivotal role in shaping the financial performance of banks. Financial efficiency is crucial for banks to remain competitive and sustainable in today's dynamic market. The article begins by defining strategic management and its key components, emphasizing the importance of aligning strategic goals with financial objectives. It then delves into the concept of financial efficiency in banking, discussing key metrics and performance indicators used to measure it, as well as the challenges banks face in achieving it. The synergistic relationship between strategic management and financial efficiency is examined in detail. Through case studies and examples, the article demonstrates how strategic management practices impact the financial performance of banks. Effective resource allocation, risk management, and the alignment of strategic goals with financial objectives are identified as critical factors in enhancing financial efficiency. Furthermore, the article explores various strategies that banks can employ to improve financial efficiency through strategic management. These strategies include balancing long-term and short-term goals, leveraging innovation and technology, expanding into new markets, and investing in human resource management and talent development. The article also discusses the challenges banks face in implementing strategic management practices to improve financial efficiency, such as regulatory constraints and emerging market trends. Finally, it concludes by highlighting the importance of ongoing strategic management practices for sustained financial success in banking and offering insights into future trends in strategic management for enhancing financial efficiency.

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