A comparative study of how banks responded to a turbulent and chaotic environment in Zimbabwe, 2000 – 2008

Abstract

The concept of strategy has advanced significantly from when the emphasis fell on comprehensive, systematic and rational planning. However, many of the assumptions that were embedded in traditional strategy models were deemed to be inadequate and outdated as we approached a new competitive milieu (Maritz, 2010). Strategic Management is still a comparatively young field and the existing toolbox of concepts and techniques remains woefully inadequate (Grant, 2010). This reality should force a re-examination of the traditional strategy paradigms (Maritz, 2010). The literature review has confirmed the observations by Maritz (2010) and Grant (2010) that indeed current strategic management paradigms or approaches were inadequate for unique business environments obtaining in a developing country in Africa, such as Zimbabwe. The motivation for this research, therefore, was to identify and recommend strategic management approaches or paradigms applicable to banks operating in a turbulent and chaotic environment. Based on an extensive literature review, in-depth interviews were conducted with six commercial banks (three that survived the turbulence and three that failed) during the period under review. The study established that the banks that survived the turbulence had a different strategic management approach from the traditional designed ones. It was also noted in this study that in turbulent environments, strategy-making is birthed through an emergent process. When events are moving at an unprecedented speed, as was happening in Zimbabwe, the time intervals between obtaining information, analysing information, taking decisions and implementing those decisions need to be tightly compressed. The researcher coined this process Strategic Intensity (SI). On the other hand, diversification as a strategy was found to be very risky for businesses that did not have a strong foundation and that were lacking in the appreciation of the risk complexion of the businesses into which they were diversifying. This research makes a significant contribution by identifying and recommending Strategic Management approaches applicable to businesses operating in a turbulent and chaotic environment in developing markets such as Zimbabwe. Furthermore, this research also contributes towards the current debate in academic literature amongst practitioners of strategy, about how strategy is really made in organisations (Maritz, 2010). The debate centres around two opposing views: one associated with strategy-making as a formal, deliberate plan, and the other associated with strategies as evolving, ever-changing sets of outcomes that are eventually realised. Finally, the researcher proposes that further studies be conducted at the end of this study.