The Influence of Strategic Management Practice on Firm Performance: The Mediating Role of Knowledge Management Capability. The Case Study of Commercial Banks in Ethiopia

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title




This research aims to examine the influence of SMPs on Ethiopian commercial banks’ performance; all the way through the existence of knowledge management capability. Among 48,726 targets population 385 samples were selected using random sampling methods. A pilot test was administered to purify the tool. The research has used both descriptive and explanatory survey design. The study has used SPSS Version 23 for descriptive analysis to check SMPs and Amos Version 26 for testing of SEM. Examination was performed by means of frequency counts, percentages, variance and the information generated are going to be obtainable in type of charts and tables. The study outcome demonstrate that the records fit the projected model fine, together with three second-order constructs; namely SMPs which contain five first-order constructs (competitive practice, strategic planning, corporate governance, strategic planning, change management and strategy control and evaluation), knowledge management capability which has three first-order constructs (knowledge manufacture, knowledge arrangement and organizational learning) and firm performance which has three first-order constructs(return on asset, net profit, sales growth and customer retention). The model planned by the research and evidenced by goodness of fit of the model to the records, explained 95%of the variance in firm performance. The outcome of multivariate analysis gives three main results. Initially, SMPs has a positive impact on knowledge management capability; secondly, knowledge management capability has great influence on organizational performance; and finally, knowledge management capability partially mediates the influence of SMPs and firm performance (as revealed by bootstrapping analysis). The commercial banks have created different promoting factors that boot improve in quantity of customers and nurture in profitability, as a result banks are regulated by the NBE which facilitates to get higher corporate governance, the usage of technology has helped to lessen operational prices and lift cost-effectiveness. According to the study, commercial banks should keep their unique selling points and build them in such a way that they will be competitive in the market; always be open and accountable to the community and shareholders; focus on the client's dreams and increase customer-centric products; and business banks should incorporate greater updating. Keywords: CBE, WB, LIB, BIB, SMPs, Corporate governance, Strategic Planning, Change Management, Strategy Evaluation and Control, KMC and firm performance.



Change Management, Corporate governance