Environmental Determinism and Strategic Choice Among Selected Commercial Banks in South Sudan

Abstract

The purpose of the study was to assess the influence of external environmental on the strategic choice of commercial banks operating in unstable economic context. The specific objectives include to establish the environmental determinism factors in South Sudan, to explore the usefulness and flexibility of existing strategic plans and processes in adopting to disruptive business environment, to analyze changes in structure and operational model due to external environmental changes and to establish the performance of banks through their resilience in management of niche market in a disruptive business environment. The study adopted multi-case approach where Managing Directors (MDs) were directly interviewed. There are 29 licensed commercial banks in republic of South Sudan. However, interviewees under research consisted of seven MDs of Commercial Banks that have different ownership structures market size and network, age of the bank. The analysis was carried out through cross-case and intracase content analysis of the KIIs from the field survey using bank managers from selected banks. Findings are indicative that environmental determinants are hard to predict and can render formal strategic plans irrelevant. Another key finding was that restructuring and remodelling emerged as the key to surviving through the turbulent times of environmental determinism. In terms of performance, only two banks survived the environmental factors to make profits while the rest made heavy losses. In conclusion, the study noted that banks that failed to adjust their strategies could not survive the environmental determinants and hence endured heavy losses. Another conclusion was that niche market and brand image could not be sustained if entrepreneurial adaptation was not embraced through restructuring and remodelling of banks. It was also concluded that performance was dependent on how environmental factors were handled through risk of entrepreneurial skills approach. In its recommendations, the study points out that environmental determinants should be studied with respect to entrepreneurial approach. Banks to study their structures and models for unexpected circumstances. It is also recommends that performance should not be strictly based on strategic plans. Finally, the study recommends carrying out similar studies outside South Sudan to determine how strategy requires entrepreneurial approach during turbulent times and if the turbulent affects in a similar intensities. Studying areas of environmental turbulence is complex with security and trust issues a limiting factor.