Effect of Globalization on Strategy Formulation in Selected Banks in Anambra State, Nigeria

Abstract

This study advances prior knowledge on globalization and business by empirically ascertaining how this phenomenon affects strategy formulation in the banking industry. The study which is anchored on the World System Theory, seeks to establish effect of globalization on strategy formulation. To achieve this, data were collected using a structured questionnaire. Validity of the instrument was verified by experts in Management, while reliability of the instrument was tested using the test-retest method. Data collected were analyzed using Pearson Product Moment Correlation. The results of the analysis provide considerable support for literature arguing that globalization acts as a two-edged sword: one that can be beneficial on one hand and detrimental to business on the other hand. It has such beneficial implications as quick movement in the quality of local goods, inflow of foreign investment and improved relations between countries. The negative effects include brain-drain, reduced patronage of locally-manufactured goods, job losses and the effect which recession in other countries” economies has on the local economy. It is therefore recommended that innovative and effective strategies should be designed and implemented to enable banks capitalize on global opportunities while carefully managing the inherent threats. Alliance formation and strategy flexibility were also recommended as means to maneuver banks through globalization.

Keywords: Globalization, Strategy Formulation, World System Theory.