Impact of Business Environment On Organization Performance in Ethiopia (Repaired)

Impact of Business Environment on Organization Performance in Ethiopia:
The Case of Bank of Abyssinia.
Selome Lemma
Alpha University College
Addis Ababa, Ethiopia
July 2020
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Impact of Business Environment on Organization Performance in Ethiopia:
The Case of Bank of Abyssinia.
By: Selome Lemma
Advisor: Tadesse Negash (phD)
A Thesis Submitted to the Graduate Studies of Alpha University College

in Partial Fulfillment of the Requirements of the Degree
of Master of Business Administration.
Alpha University College
Addis Ababa, Ethiopia
July 2020
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Acknowledgement
I would like to sincerely thank all of the officials of the organization, and the individuals, who
gave me information I needed to conduct the research. I appreciate the support and assistance
from my families, especially, my father, other members of my family, and all my friends who
kept in high morale while doing the research. My appreciation also goes to my advisor for his
support, guidance and encouragement at all stages of the research.
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Declaration
I, hereby, declare that this research is my original work carried out by myself, independently.
This work has not been submitted earlier in full, or in part, for the award of any other similar
degree to this or any other university or institution.
Name:__________________________________
Signature:_______________________________
Date:___________________________________
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Advisor’s certification
This is to certify that the thesis entitled “Impact of Business Environment on Organization
Performance in Ethiopia: The Case of Bank of Abyssinia.’’ Submitted, in partial fulfillment of
the requirements for the master degree in business management, to the school of graduate studies
of alpha university college has been carried out by Selome Lemma Bizuayehu. The student
researcher has competed the work under my supervision. It is difficult to avow whether or not
this work is similar to another work submitted to this or any other university without the proper
“search” technology. However, I happily recommend that the work be submitted to the graduate
studies.
Advisor: Tadesse Negash (phD)
Signature:_________________
Date:_____________________
v
Approval
by
the Board of Examiners
and
the Management Department
of the School Of Graduates Studies
“Impact of Business Environment on Organization Performance in Ethiopia:
The Case of Bank of Abyssinia.’’
By
Selome Lemma Bizuayehu
This is to certify that the thesis prepared by Selome Lemma Bizuayehu with the title “Impact of
Business Environment on Organization Performance in Ethiopia: The Case of Bank of
Abyssinia.’’, and submitted in partial fulfillment of the requirements for the degree of master in
business management, complies with the regulations of Alpha University Collage and meets the
accepted standards.
The Examining Board
______________________ _______________________ __________________
Name of external examiner Signature Date
______________________ _________________ ___________________
Name of internal examiner Signature Date
______________________ __________________ ____________________
Departmental approval Signature Date
____________________ ____________________ ____________________
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Contents
Contents .................................................................................................................................................. vii

Abstract ........................................................................................................................................................ xi
Chapter One .................................................................................................................................................. 1
1.0. Introduction .................................................................................................................................. 1
1.1. Background/Rationale of the Study .............................................................................................. 1
1.2. Statement of the Problem ............................................................................................................ 2
1.3. Research Questions ...................................................................................................................... 4
1.4. Objectives of the Study ................................................................................................................. 4
1.4.1. General Objective ................................................................................................................. 4
1.4.2. Specific Objectives ................................................................................................................ 4
1.5. Scope/Delimitation of the Study................................................................................................... 5
1.6. Limitations/Constraints of the Study ............................................................................................ 5
1.7. Significance/Contribution of the Study......................................................................................... 5
1.8. Organization of the Final Paper .................................................................................................... 6
Chapter Two .............................................................................................................................................. 7
2.0. Literature Review .......................................................................................................................... 7
2.1. Business Environment ................................................................................................................... 7
2.2. Organizational Performance ......................................................................................................... 8
2.2.1. Financial Perspective............................................................................................................. 9
2.2.2. Customer Perspective ......................................................................................................... 10
2.2.3. Internal Business Perspective ............................................................................................. 11
2.2.4. Learning and Growth Perspective ....................................................................................... 12
2.2.5. Social Perspective ............................................................................................................... 14
2.3. Theoretical Framework ............................................................................................................... 15
2.4. Organizational Performance Objectives ..................................................................................... 17
2.5. Effects of Business Environment on Organizational Performance ............................................. 17
Chapter Three ............................................................................................................................................. 20
3.0. Conceptual Framework ............................................................................................................... 20
3.1. General........................................................................................................................................ 20
3.2. Business Environment ................................................................................................................. 20
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3.2.1. Opportunities ...................................................................................................................... 21
3.2.2. Threats ................................................................................................................................ 21
3.3. Organizational Infrastructure...................................................................................................... 22
3.4. Firm’s Strengths .......................................................................................................................... 23
3.5. Firm’s Weaknesses ...................................................................................................................... 23
3.6. Profitability.................................................................................................................................. 23
3.7. Research Questions .................................................................................................................... 24
Chapter Four ............................................................................................................................................... 25
4.0. Data Collection Method .............................................................................................................. 25
4.1. Population of the Study .............................................................................................................. 25
4.2. Sample and Sampling Technique ................................................................................................ 25
4.3. Sources of Data ........................................................................................................................... 26
Chapter Five ................................................................................................................................................ 27
5.0. Data Analysis ............................................................................................................................... 27
5.1. Data Analysis and Interpretation of Results ............................................................................... 27
Chapter six .................................................................................................................................................. 41
Chapter Seven ............................................................................................................................................. 43
7.0. Conclusion and Recommendation .............................................................................................. 43
7.1. Conclusion ................................................................................................................................... 43
7.2. Recommendations ...................................................................................................................... 44
7.3. Recommendations for Further Research .................................................................................... 45
References .............................................................................................................................................. 46
Appendices................................................................................................................................................. i
Appendix I: Budget/ Cost for the Study ..................................................................................................... i
Appendix II: Time/Work Schedule ............................................................................................................ ii
Survey Questionnaire..................................................................................... Error! Bookmark not defined.
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Table of Figures
Table 5.1Demographic Information about the Respondents___________________________28

Table 5.2:Percentile and Ranks of business Factors______________________________32
Table 5.3:Percentile and Ranks of business environment Factors___________________35
Table 5.4: Percentile and Ranks of Business Opportunities________________________36
Table 5.5: Percentile and Ranks of Business Threats_____________________________36
Table 5.6: Percentile and Ranks of Organizational Infrastructure___________________ 37
Table 5.7: Percentile and Ranks of Firms Strengths______________________________38
Table 5.8: Percentile and Ranks of Firm’s Weaknesses___________________________39
Table 5.9: Percentile and Ranks of Firm’s Profitability___________________________40
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Table of charts
Chart 5.5: pie chart on the job position of the respondent_________________________28
Chart 5.4: graph on the age limit of the respondent______________________________29
Chart 5.3: Graph on the work experience percentage of the respondent______________29
Chart 5.2: Pie chart on educational level of the respondent________________________30
Chart 5.1: Pie chart on gender combination of the respondent_____________________ 30
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Abstract
The research work focused on the implication of the business environmental factors on the
survival and growth of business organizations in the banking sector with reference to Addis
Ababa metropolis of Ethiopia. The study identified some environmental factors that were
peculiar to the business organizations in the banking sector vis-a-vis their significant impact
through the administered questionnaires to employees of selected business. Internal
organizational business environment, government policies and fraudulent practices were found
as factors critical with severe impact on the survival and growth of business organizations in the
banking sector among other factors which was adduced as the underlying rationale behind
exodus of banking industry to the neighboring countries. The use of 0.05 level of significance
further confirmed the impact of each of the environmental factors on the survival and growth of
business organizations and concluded that these factors signified impending danger that may
impede the survival of these business organization and make growth an impossible task if left on,
thus recommended among others that the present arrangement (policy) of the organization.
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Chapter One
1.0. Introduction
1.1. Background/Rationale of the Study
No business organization can operate successfully in isolation without dependence on supportive

institutions, variables and factors (Oginni, 2010) i.e business organization exists and
operates within an environment where there is complex interplay in terms of activities as well as
networks of relationship between and among human resources, material resources and other
systems. In the views of Aborade (2005) all business decisions are found to be contingent
upon a good analysis of the environment which is often the bane of all the constraints as this
environment creates the opportunities, threats and problems for the business organization.
Evolving from this is the belief that business organization is an integral part of its environment
on the ground that they are mutually interdependent and exclusive where the environment
plays the role of providing the resources and opportunities to organization for its
existence, and the business organization in turn, offers its goods and services to the people
living in the environment for survival and enlightenment (Ajala 2005). This is also in line with
the views of Adi (2006) that the most important sole influence on organizational policy and
strategy at any point in its development is the environment, both within and outside the
organization. Akanji (2003) was of the opinion that the more complex, turbulent and dynamic an
environment becomes, the greater the impact on human attitudes, business, organizational
structure, market and process as well as facilities, therefore there is need for all organization to
direct their attention to the environment when formulating their strategic management policies in
order to facilitate their survival, growth and profit motives.
To understand organizational performance, one must know the elements inside and
outside organization known as Environmental factors. This refers to different forces or
surroundings that affect business operations. Such forces include customers, competitors,
suppliers, distributors, industry trends, substitutes, regulations, and government activities, the
economic, demographic and social and cultural factors. Others are innovations and technological
steadfast and unchanging, it is change itself. Change is inevitable and those organization
unstable, with long-term survivability in question. There are things, events, or situations that
occur that affect the way a business operates, either in a positive or negative way. These things,
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situations or events that occur affect the organizational performance in either appositive or
negative ways are called driving forces or environmental factors. In contemporary Ethiopia
business environment, performance of Ethiopia companies is predicated on factors such as
low-sales, high cost of production, low capital utilization lack of foreign exchange to source
needed inputs, poor power supply and low quality of goods and services, among others. These
issues have led to lack of proper integration and coordination of various corporate sub systems in
Ethiopian organization, resulting in the failure to achieve the stated goals and objectives.
Entrepreneur subsumed in the environment with which they interact by importing inputs
and exporting outputs. Thus, the vagaries and the extremities of the environment affect the
fortunes of organization
1.2. Statement of the Problem
Business is any commercial or economic activity that tends towards business profit. The primary,
objective of business organization is to make profit, grow and survive in the environment
in which it operates. The environment in which business organization operates is a complex,
multi-focus dynamic and has a far reaching effect on such organization. The environment tends,
shape the outlook, and goal of the organization by placing constraints on them. These constraints
in the environment of organization goal could be in the form of competition, these sets a limit on
the goals specify by the organization. For instance, trade union asking for increase in salary, will
affect the shareholder dividend. Unethical behavior also affects profit. All these settings provide
multiple contexts that influence how the organization operates and how and what it produces.
(Oghojafor, 1998) In management, the word “Environment” does not necessarily mean physical
surroundings, but is used to describe all those influences that bear upon the individual
organization. Business environment is used to mean anything, which surrounds the
business organization. It affects the decisions, strategies, process and performance of the
business. The environment is consisting of factors which are beyond the control of the business
(STEP) social, technological, economical, legal and political. It provides opportunities or poses
threats to the organization. Since business makes demand on the society and the society makes
demands on the business, managers in any organization must interact with and respond to
environmental factors internal or external to their organization. The sum of these
interrelationships within the business and between the business and the society is what is
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the management regarded as business environment. Organization survival and success depend
on the appropriate adoptions to a complex and over changing environment. It is pertinent for top
management of organization to identify opportunities and threats in the external environment.
Internal environment, it should focus on strengths and weakness, potential and existing ones. It
should respond swiftly, in order to know where it can have competitive advantage over its rivals.
Therefore, any organization should look or search its environment continuously. Oghojafor
(1998). The Ethiopian business environment has witnessed a lot changes from the period of the
oil boom in the 1960s and the early 1970s. Austerity measures in the early 1980s and the
structured adjustment program in the late 1980s from the company act of 1960s allied matter
decree in the 1990s, undoubtedly brought in the eighty’s the opportunities to be exploited
by some firms or the problems that inhibit the survival of so many business firm. The
need for studying business environment became important considering the fact that business
organization do not operate in vacuum and effective management in complex and dynamic
society such as Ethiopia, requires the assessment of strengths and weaknesses of the organization
and the opportunities and threats posed and the challenges of the external environment. For
survival and growth, organization must adapt to these changes. The objective of this study is to
examine the impact environmental challenges on the performance of business organization
specifically on bank of Abyssinia.
In the face of all these challenges, how effectively can a business organization respond to its
basic operational functions of survival, growth and profit maximization, hence the need to
examine the environmental factors in business environment of the organization with
implications on the survival and growth of business organization in Addis Ababa metropolitan
area of Ethiopia.
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1.3. Research Questions
What is the business environment in which Bank of Abyssinia operate?

What are the opportunities and threats to banking operation that emerge from the
business environment in which the Bank of Abyssinia operate?
How does Bank of Abyssinia deal with the opportunities and threats confronting their
operations?
How does the Ethiopian banks’ efforts in addressing the opportunities and threats that
their operations face impact these banks organizational characteristics?
What kind of organizational and operational arrangement and operational service quality
emerge out of the organizational characteristics or conditions?
What is the business success of Bank of Abyssinian terms of profitability> what is the
reason for the profitability performance of the bank(s) participating in this study.
1.4. Objectives of the Study
1.4.1. General Objective
The general objective of this study is to examine the impact environmental challenges on the
performance of business organization, the case of bank of Abyssinia.
1.4.2. Specific Objectives
Specifically, the study was intended to achieve the following objectives:
To identify the business environment in which Bank of Abyssinia operate.

To examine the opportunities and threats to banking operation that emerge from the
To determine the extent that Bank of Abyssinia deals with the opportunities and threats
confronting their operations?
To identify the efforts in addressing the opportunities and threats that their operations
face impact the bank’s organizational characteristics?
To assess the kind of organizational and operational arrangement and operational service
quality emerge out of the organizational characteristics or conditions?
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To identify the indicators of business success of Bank of Abyssinian terms of
profitability
1.5. Scope/Delimitation of the Study
Scope of the study was indicating its range of action or areas of influence. In this case the study
was given a great emphasis to the impact environmental challenges on the performance
of business organization. With a geographical limitation of the city Addis Ababa, specifically on
the bank of Abyssinia. By preparing self-administrative questionnaires and distributing to
the selected respondent it could be less time wasting and cost effective at the same time
giving viable data.
1.6. Limitations/Constraints of the Study
This study was limited to the service sector (banking sector) and therefore finding could not be
applicable in the other sector.
Some limitations that was from the Unwillingness of respondents in giving the required
and right response. An inability to answer the research questions
Age of data- In w/c the study was based on secondary data; pay extra care to the age of
the data. Making current an assumption based on old data was represents a strong
limitation.
From lack of settled time from the company in order to get the respondents freely.
1.7. Significance/Contribution of the Study
The research work was provide insight into the dynamism of business environment
through which major and minor constraints in the environment were identified, the role of
environmental factors in ensuring as well as heralding survival and growth of business
organization in relation to danger posed by these environmental factors was identified. The
work has equally placed environmental factors in the fore front of business survival and growth
thus enlightening that the success of any business organization is contingent on
understanding the environmental influential factors.
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1.8. Organization of the Final Paper
Chapter one presents the introduction to the research. As the name suggests, this introduces the
entire research by highlighting the need and purpose for this study. It was also discussed the
local content of the research. It then introduces the rest of the chapters.
Chapter two reviewed the prior relevant literature on the subject under study. These have
discussed in detail the prior studies on project failure, causes of project failure and effects of
project failure. It was also discusses the theoretical framework for the study.
Chapter three present the methodology for the study by discussing the research
philosophies underpinning this research, the choice of research methods, research
strategies, types of research, sampling techniques, and justifications for the various choices made
for this study.
Chapter four explains in detail how the data for the study have collected and analyzed. This was
only for the groundwork undertaken during the actual data collection and data analysis
processes.
Finally, chapter five presents the conclusion of the research by summarizing the main
findings of the study. It was also highlighted the contributions that this study makes to both the
academic and the practicing fields. It was also highlighted the limitations of the study and makes
recommendations for further studies.
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Chapter Two
2.0. Literature Review
2.1. Business Environment
Relevance between theory and practice that occurs has prompted experts and researchers
to indent research related to general business management and strategic management in
particular.
A number of researchers have proposed various models of strategic management.

Strategic management model proposed by Wright, Kroll and Parnell (1996) contains five basic
frameworks, namely: (1) opportunities and external threats that include macro environment and
industry; (2)
The internal environment that includes the company's resources, the organization's mission and
goals; (3) Formula strategies include koporasi level, business unit level and functional level; (4)
Implementation of the strategy which includes organizational structure, leadership, authority, and
organizational culture; and (5) that includes the strategic control process and performance.
Fundamental understanding into key points in this model is the formulation of a strategy that is
divided into phases of corporate, business unit and functional levels. Furthermore, Wheelen and
Hunger (2010) outlines the strategy formulation directly in the elaboration of a more operational
level, namely the mission, goals, strategies, and policies. As for the implementation of the
strategy outlined in the degree program, budget, and procedures. In a pragmatic model of the
strategic management of Wheelen and Hunger looks easier to understand and easier to
implement, although from the aspect of leadership, structure, and culture look less highlighted in
the model they put forward.
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2.2. Organizational Performance
An important role of organizational performance to support business processes have

received special attention management experts. Empirically, the researchers have tested the
use of a construct of performance for a variety of issues related to the survival of an
organization (Venkatraman & Ramanujam, 1986). Performance, according to Whitmore
(1997), is an achievement of the target in the form that must be known and communicated to all
parties within the organization, and are associated with vision assigned to an organization.
Narrowly, business performance reflects the achievement of the objectives ekenomi an
organization that is reflected in the financial indicators. A financial indicator-based performance
measure is referred to as an indicator of financial performance and it has become the main model
in research in the field of startegik (Hofer, 1983). Generally, financial indicators used for this
approach is sales growth, 9
Profitability (which is reflected by the return on investment, return on sale, and return on
equity), earnings per share, and so on. In addition, in an effort to better reflect current market
conditions, the researchers also used the areas of strategy-based performance measurement
market, such as market-to-book or stock-market returns and the like (Montgomery, Thomas,
&Kamath, 1984). Broader conceptualization of business performance is pengukuaran
performance that incorporate operational performance indicators (nonfinancial) in addition to
the measurement of financial performance. This is done because the financial measures are
not fully able to provide a real picture of the state of the company. Under this conceptual
framework, measurements such as market share, new product introduction, product quality,
marketing effectiveness, the value-added, and another measurement of the efficiency of the
technology included as indicators of organizational performance measurement. Besides the
performance measurement paradigm as described above, in the late 1980s emerged a new
paradigm known as the balanced scorecard.
This idea evolved because companies have already started to think to balance the performance of
non-financial information with financial data. Integration between the performance of non-
financial and financial data will help the company to determine the strategy for the challenges of
the future. Balanced Scorecard arises from a simple argument is that the financial model of the
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business alone is no longer sufficient as the primary way to manage performance. The financial
model is beneficial to provide details about what happened yesterday, but only slightly helpful in
managing the development of the business. This is because the financial model displays the data
obtained historically and illustrates the company's past performance that is hard to describe the
situation what will happen in the future.
Furthermore, the measurement of the performance of the balanced scorecard approach to

Performance evaluation is done by considering the company 4 (four) perspectives (Kaplan
& Norton, 1996), namely financial perspective, customer perspective, internal process
perspective, and learning and growth perspective. A more detailed description of each
perspective are as follows:
2.2.1. Financial Perspective
Financial perspective into focus the objectives and measures in all other balanced
scorecard perspectives. Each measure must be part of a causal relationship, which in turn will be
able to improve financial performance. Mulyadi and Setiawan (2001: 347) explains that the
financial performance measures indicate whether the strategies, goals, strategic initiatives
and implementation is able to contribute in generating profits for the company. Financial
measure commonly manifested in profitability, growth and shareholder value. Financial
perspective can be measured through appropriate financial ratios financial statement profitability
ratio, which is a tool to analyze or measure the level of business efficiency and profitability
achieved by the companies concerned. Generally ratios used are: (1) Return on Assets (ROA).
Ratio This ratio is used to measure the ability of management to obtain an overall profit,
and (2) Return on Investment (ROI). This measure is used to align the income generated by the
investment level.
Furthermore, the application of the balanced scorecard to measure the performance of a

financial perspective, the company needs to determine the strategic objectives relating to
the company's ability to survive the financial sector, successful and prosperous, and then
determine the size of the results for each of these strategic objectives. Measurement used
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can be very different in each stage of the business life cycle. Kaplan and Norton (2000: 42-43)
divide the business life cycle into three stages.
(1) Growth
This stage is the initial stage of the business life cycle. In this stage the company usually has a
negative cash flow and returns on capital are low, then the measurement used is the rate
of growth of sales or revenues.
(2) Sustain
In this stage the company is expected to maintain existing market share and gradually grow year
after year. Most at this stage the company will establish financial goals related to profitability.
This purpose can be expressed by means of the size associated with the accounting
profit as operating profit and gross margin. This measure considers the investment capitals of a
company is already fixed and ask the manager to maximize the revenue generated from
the capital investment. In addition, at this stage the company was asked to not only manage
the flow of income but also the level of investment capital invested. The measures used to
regularize the profit generated by the return on investment.
(3) Harvest
A stage in which the company gains from the investment made. This stage is achieved by firms
in producing its products have reached saturation point. The company just invested in the
maintenance and repair of facilities that have been owned. The overall financial objectives for
the business at this stage is the operating cash flow (before depreciation) and saving
various working capital requirements.
2.2.2. Customer Perspective
In the perspective of the company's customers identify market segments and customers where
they will compete. A market segment that will be the source of a major component of financial
goals, or it could be said that the market or sales are the backbone of the company's
sustainability. Customer satisfaction in enjoying the products or services of the company is an
10
important variable to assess the success of a company, because without the presence of
the consumer can be sure that the existence of the company will not last long. Customer
perspective enables companies to identify and measure the proportion of the value to be
given by the company to customers and target markets. Mulyadi (2001: 238) states that the
measure can be used to measure the success of achieving the strategic target customers are: (1)
market share, (2) customer acquisition, (3) customer loyalty, (4) customer satisfaction, and
(5) profitability customer. Market share reflects the proportion of businesses owned by the
company in a market segment. Customer acquisition reflects the company's ability to attract or
win new customers or business. Customer loyalty reflects the company's ability to sustain
or maintain relationships with existing customers. Customer satisfaction reflects the
company's ability to satisfy its customers based on certain criteria (such as quality, time,
price). Customer profitability reflects the ability of the service to the customer or a specific
market segment in generating profits.
2.2.3. Internal Business Perspective
This perspective refers to the work done in the organization. In this perspective the
organization's performance is measured by how the organization is run and whether the
organization can operate production or services effectively and efficiently according implied or
organization that claim to be customers. Kaplan and Norton (2000: 83) explains that in
perspective, there are three main components, namely (1) the process of innovation, (2)
operational processes, and (3) the service process. Explanation of each of these components are
as follows:
(1) The process of innovation. In the process of innovation, business unit examines emerging
customer needs or are still hidden, and then create a product or service that will meet
those needs. Innovation process is divided into two parts: identifying market needs and create
products or services to meet the needs of the market.
(2) The process of operation Process operating companies show activities undertaken by
the company begins from the receipt of a customer order and ending with the delivery of
products or services to customers. This process focuses on the delivery of products and services
to existing customers in an efficient, consistent and timely. Customers appreciate the grace
11
period (lead time) are reliable as measured by their timely delivery. A company must always
measure cycle time and set goals for employees to reduce the overall production process cycle
time.
(3) The process of service This process is a service to the customer after the sale of products or
services are performed. After-sales service activities include warranty and repair, and
replacement of defective products that are returned and processing customer payments.
2.2.4. Learning and Growth Perspective
In this perspective measure matters relating to human resources. There are three dimensions that
must be considered in this perspective are:
(1) The ability of Employees Measurements were performed on three main points namely
measurement of employee satisfaction, measurement of employee turnover in the company, and
the measurement of employee productivity.
(2) Information System Capabilities Measurement of the company can be done by measuring the
percentage of availability of the information required by the employees of the customer,

the percentage of availability of information on the cost of production and others.
(3) Motivation, Granting Privileges and Restrictions Authority Employees Measurements can be
done through several dimensions, namely: (a) Measurement of the advice given to the company
and implemented, (b) Measurement on improving and improving employee performance, and (c)
Measurement of the limitations of the individual within the organization. To determine the
objectives and measures related to the ability of the employees there are three things that will be
considered in this study are:
(1) Productivity of employees
Is a measure of the results, the overall impact of efforts to increase employee morale
and expertise, innovation, and customer satisfaction? The goal is to compare the output
generated by the number of employees who were deployed to produce the output. There are
12
many ways to measure labor productivity and one of the simplest measures of productivity
is per capita income.
(2) Percentage Skilled Employee
Training Coaching and development of human resources is a priority concern. This is done in an
effort to increase competence in managing the management, so that employees can continue to
grow and skilled in their respective work units.
(3) Employee satisfaction
Overall job satisfaction is now considered very important by most companies and this is a pre-
condition to improve productivity, quality responsiveness, and customer service. To
achieve employee satisfaction, then the manager can conduct surveys on a regular basis.
There are several elements of employee satisfaction about involvement in decisions (Lasdi,
2002), namely (a) Recognition; (B) Access to information; (C) active encouragement to
creativity and initiative; and (d) Support boss Gaps in the financial aspect, customers, and
internal company processes can be detected by using a balanced scorecard. To make
improvements to the performance and reduce the gap companies need to implement
employee training programs and continuous improvement system that is aligned with the
procedure (Ward, 1999). Balanced scorecard emphasizes the company's efforts to
implement the investment for the sake of the future, including human investment, systems
and procedures. Human or corporate employees need to be given regular training to increase
skills or abilities in order to meet changing customer and environmental guidelines. The
system needs to be improved by using information technology. In this perspective to measure the
importance of a business organization to continue to pay attention to their employees, to monitor
the welfare of employees and increase employee knowledge. This happens due to the
increased level of knowledge of employees will increase the ability of employees to
participate in the achievement of corporate goals. Excellence in the balanced scorecard
concept of strategic planning system is able to produce a strategic plan that has the following
characteristics (Mulyadi, 2005):
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(1) Comprehensive Balanced scorecard broaden perspectives covered in strategic planning.
Expansion perspectives of strategic plans for the non-financial perspective generates

benefits consist of: (1) Promising financial performance and sustainable multiplied; and (2) the
ability of the organization to enter complex business environment.
(2) Coherent Balanced scorecard requires personnel to establish a causal link between the
strategic objectives resulting in strategic planning.
(3) Balanced Balance of strategic targets generated by the system of strategic planning is
important to generate long-term financial performance.
(4) Measured Measurable strategic targets generated by the system of strategic planning
promising achievement of strategic objectives generated by the system. In this study disampaing
4 (four) balanced scorecard perspectives, researchers also will exclude social perspective as one
measure of organizational performance. This is done because the object of study in this research
is a microfinance institution. In general, one of the indicators of the success of the institution in
question is their ability to reduce poverty.
2.2.5. Social Perspective
Especially for Microfinance Institutions (MFIs) there is a social aspect that should be added for
performance assessment such institution. This addition is based on the argument that in order to
measure the performance of an MFI, we not only consider the aspect of financial sustainability
(balanced scorecard) of the organization, but also must consider aspects of improving the living
standards of clients (social perspective) as a measure of the success of an MFI's

principal, including Cooperative Financial Services in it. This is in line with research that has
been done Matul&Simonyan (2007) on Microfinance Institutions MDF-Kamurj in Armenia
and Pawlak&Egusquiza (2007) on the NGO Manuela Ramos-CrediMUJER in Peru.
14
2.3. Theoretical Framework
Effect of the Business Environment and Organizational Performance Temtime &Pansiri (2004),
in a small business research entitled critical success / failure factors in developing economies:
some evidence from Botswana, conducting research on 203 units of SMEs (Small and Medium
Enterprises) in three cities in the republic of Botswana. They used a questionnaire as a tool for
collecting research data, and analyze the data with statistical techniques aided descriptive and
inferential statistics. Their results showed that the development of human resources,
organizational development, the background manager, managerial leadership and
competitive strategy is an important component that affects the performance of the organization
(SMEs). The main criticism we can give to this research is the research question still
contain fundamental flaws in the design aspects of research, conceptualization and
operationalization of the factors that become a critical aspect of the success and failure of SMEs.
Thus, further, we need a re-16
Explored on their research to include external factors, h as the role of government, competition,
and so on. Furthermore, research conducted by Munizu (2010) with the title of the influence of
external factors and internal to the performance of micro and small enterprises (MSEs) in South
Sulawesi, which is held in the city of Makassar and ParePare, and involved 300 respondents.
Next, Mappingau &Maupa (2012), in a study entitled entrepreneurial intention and small
business growth: an empirical study of small food processing enterprises in South Sulawesi,
Indonesia, conducting research on 137 units of small businesses in the food maker Erekang
region of South Sulawesi. They used a stratified random sampling and questionnaire as
techniques and tools to collect research data, and analyze the data with path-aided engineering
analysis. The results of their research to document empirically that both internal factors
(availability of start-up capital, the desire for self, family support, a model of
entrepreneurship, personal skills, and work experience) and external factors (availability of
assistance and support from the government, the availability of processing technology,
availability of raw materials, and option markets) simultaneously and positively affect the
growth of small businesses. Criticism that can be raised above their research is the
conceptualization of organizational growth has not been formulated clearly, so that the further
research of this variable should be developed in a more measured, such as organizational
15
performance variables. Furthermore, Herman (2011), in a study entitled influence business
location, business character of the business strategy and business performance of small industry
in North Sulawesi, carry out research on the 6 districts / cities (each of the three counties /
cities) in North Sulawesi. He used questionnaires in research involving 200 respondents,
and then analyze the data using descriptive analysis and structural equation modeling
(Structural Equation Modeling-SEM). Research results conclude that government regulation,
competition and business location significantly influence business strategy. Being small
industrial business performance is significantly affected by government regulation,
competition, business characteristics through business strategy. Criticism which can be
raised against this study is the researchers did not include the uncertainty of the environment
variable in examining the relationship between business strategy and organizational
performance, so that in future studies mentioned variables should be considered as one
dimension of business strategy variables. Of a partial picture of the influence between each
variable that consists of the external environment, internal environment, and cooperative
performance, it can be arranged as represented research paradigm shown in the figure below.
This research attempts to explain and predict the effects of external and internal environment
for the performance of Cooperative Financial Services. The external environment affecting the
cooperative financial services is the level of competition in similar businesses, governments, and
environmental uncertainty, while the internal environment affecting the financial services
cooperative strategy is the ability of the cooperative management, human resources, participation
of members, and cooperative capital.
Both aspects of this environment must be addressed by the cooperative financial services in its
business strategy. If it is run, then the cooperative financial services will obtain high
performance.
16
2.4. Organizational Performance Objectives
Organizational performance involves the using of resources wisely to avoid wastage. Given by
the interaction between organization and environment, it follows that performance relates to how
an organization reacts, understands and influence to certain environment changes. Unfortunately,
people do not want to perform those duties without a concession. For example they can perform
their duties in short time if well planned. Through firm money intending to take unnecessary
action and decision such as embarking on research and development, which may displease the
investors who have a short time to stay. Okunola (1998) described organization as an
entity formed by or comprising a group of people with the aims and objective carrying
out some specific functions or performance of responsibilities or the other. Derek
(1998) defined performance as the willingness of an individual to carry out the goals and
objectives of an organization. Organization performances is however, defined as a group of
people that come together and are willing to carry out goals and objective and planned or
strategize. Organization performance is the ability of group of individual to achieve certain of
specific goals.
2.5. Effects of Business Environment on Organizational Performance
The business environment and its application to work environment is an outcome of his work as
director of the institute of social research, university of Michigan, USA. In his book
“New Pattern of Management” about high producing supervisors who achieve the highest
level of productivity at the lowest production costs with the highest level of employee
motivation. In his research work, he indicates that high producing managers tend to build
their successful achievement around their interlocking work groups employees whose level
of co-operation is sustained through range of business incentive that extend motives and
involves the ego and creativity motives. The research noted that the high producing manager
utilized the tool of the classical management work-study while recognizing the aspirations of
the employees by encouraging participative approaches. Okunola stressed the important of
supportive relationship; management can thus achieve very high productive performance when
the employees see their European Scientific Journal November 2015 /SPECIAL/ edition ISSN:
17
1857 – 7881 (Print) e - ISSN 1857- 7431 Membership of the work group as “Supportive”, that is,
when the experience a sense of personal worth, importance and recognition from belonging to
the work group. Okunola (1998) is one management philosopher who focused on the differences
between individuals and the class of needs in addition to the market strategy, which include the
need for achievement, power and for affiliation. He further related the strength and/or
dominance of each need in individual with high need for achievement strive on jobs projects that
tax their won skills and abilities. They also set realistic goals and objective for them, such people
are usually individualistic and would want to be appraised as to how well they are.
However, the greatest disadvantage for those with achievement need is that they tend to
be more task-oriented and less concerned with strong power needs to dominate or gain
power influence of control over people. That the motivation managers and supervisors to
possess some reasonable degree of all three kinds of needs.
However, the dominant need, according to Okunola’s findings, is the need for
achievement. Nevertheless, his ideas are very important as a contribution to our
understanding of business environment how best the concept of achievement need might be
applied in practice at the work place, and especially when dealing with young, ambitious
employees. Business environment is formed not merely on some sense of objective reality,
but on its own perception of reality, business needs to properly taken care of, for profit
margin to be accurate. In consonance with this theory, individuals attempt to determine the
probability of a measure of expectancy of outcome.
The personal outcomes are rewards that organization can provide like pay increase, promotion,
bonus, allowances, level and even relationship with workmates etc, while the expected to such
outcomes refers to expectancy, the measure of importance attached to such outcomes or reward
is known as valence, the value of which are a result of the attractiveness and the opinion of the
beneficiaries about the reward in questions. In order to improve business environment therefore,
managers should improve the skill and motivational level or conditions of the employee.
In establishment where promotion is perceived as attractive prospect (valance) by a newly
appointed staff, it allows the effective performance of works, it encourages the perception of the
workers, which they have toward their job, on ‘god fatherism’, and his output is discouraged. All
efforts directed towards performance do not necessarily lead to reward but it’s been ascertain that
18
reward increase the effective performance of employees. The exhibition of negative business
environment understanding of course proves to the management the need to control
environmental factors by the creation of certain adequate adjustment and motivational incentives.
Lack of free environment problems among workers, employers and customers in the
organization allow frustration and negative uncompromising behavior which are exhibited
as apathy, increased, absenteeism, planning and execution of fraudulent acts etc. they
become disgruntled, pessimistic, counter-productive and develop defensive mechanisms. In
effect, workers indulge in acts and practices that jeopardize and negate the attainment of
organizational goals. The managers should work out the appropriate plans that would enable the
workers to be highly task-oriented towards the fulfillment of the organization ultimate goal in his
bid to reach personal goals and achieve them. It is here that the worker intensifies goals-oriented
action in his pursuits of both company incentives and personal goals. At the attainment of his
final goals, the previously aroused tension reduces and fails completely. Thus, a continuous
exhibition of the same incentive package may fail to elicit further favorable and positive
behavior from the same person. There the manager’s job is more demanding as he is
expected to know the proper solution to the situation he might be in the process of
achieving the ultimate goals of the organization.
19
Chapter Three
3.0. Conceptual Framework
3.1. General
The study framework shows the pattern of how the current research is expected to unfold.
The framework also shows the relationship between sets of variables in this pattern. The
framework shows the suggested view of the research focus (Chart 4.1).
This research focus is further shown by the research questions that look for information
to understand the subject or the study. These research questions also imply the type of
instruments to be used for collecting data.
3.2. Business Environment
The banking operation functions in a business environment that is influenced by a variety

of actors, events, situations, and others. It is helpful to understand the nature of these influencing
powers, the influences they use, and the motive of these influence.
The actors consist of the government, customers, other firms engaged in the banking
industry as financial service providers or as business partners. The government sets up the
policies and procedures, legislation framework, and the regulatory conditions which guide the
mode of the banking operators. A bank will face competition from other banks operating in the
same business environment. It is also possible for a bank to create business partnerships with
other banks in the banking industry that these bank operate, and with foreign banks as well as
with other firms in bank-related services. In a general sense, customers are a bank’s business
partners.
Past events determine the conventional business practices that banks follow. However,
the emerging events that influence banking operations comprise new technology, new systems,
new ways of doing business, and so on.
The situation existing in the banking business environment reflects the expectations,
actions, as well as demands of all stakeholders in the banking operation including the
government, customers, business partners, and others. This situation is, in part a result of the
20
government policies, legislative framework, and regulatory conditions designed to force banks to
operate in responsible ethical, secured manners.
The economic and educational sectors are aspects of the business environment that play
a crucial role in influencing the way banks function. Banks are linked to the economic sector in
terms of addressing that sector’s needs, managing inflation, and other such matters. The ability
of the educational sector to provide banks with their human resources needs, in terms of number
and relevant work qualifications, is highly important.
3.2.1. Opportunities
The business environment contains situations that are friendly. Aspects of the banking
business environment provide banks with business opportunities to be pursued
Some of the opportunities to be pursued are easy to recognize and adopts. There are
those opportunities that are difficult to recognize and adopt. The process of recognizing
opportunities requires skill, understanding and experiences in identifying them and determining
whether it is worthwhile to adopt them.
3.2.2. Threats
The banking operation faces situations that are not so friendly. This consists of threats,
that challenge the bank’s operations. The threats may be recognized as current possibilities may
considered to occur in the future. As in the case, of recognizing opportunities, threats may be
easily recognized and dealt with or may require skill, understanding, and experience to detect
and handle the undesirable effects of the challenges.
21
3.3. Organizational Infrastructure
The organizational infrastructure of a bank refers to the capacity, facilities arrangements,

and type and quality of services provided by that bank. The capacity of the banking firm refers
to the determination of the size of the bank in response to the opportunities to be pursued and the
threats to avoid.
A bank is expected to have a well-organized head office with sufficient financial

resources, relevant professionals, and a sound organizational structure comprising of adequate
departments and branch facilities. This depends on the soundness of the opportunities pursued
and completeness of the threats avoided.
Similarly, a bank is expected to develop bank products and services that satisfy the needs
of its customers. This is also possible on the soundness of the opportunities pursued and the
threats avoided.
Chart 1: Business Environment Impact on Banking Operations and Performance
Opportunities Firm’s
Weakness
Business Organizational
Environment Profitability
Infrastructure
Firm’s
Threats
Strengths
22
3.4. Firm’s Strengths
An aspect of the banking organizational infrastructure, established in response to

opportunities and threats existing in the banking business environment, is the determination of
the capacity (size) of the operating bank. Similarly, the organizational infrastructure established
in response to environmental business opportunities and threats determines the bank’s
arrangement of its resources, facilities, products, and services.
The state or quality of the organizational infrastructure in place is the basis for the way a
bank functions. The firm’s strength arises from aspects of the organizational infrastructure –
such as the type of its resources, performance of these resources, mode of operation, and other
characteristics – contribute to the successful operation of a bank and achievement of its goals.
Management should take care of these organizational characteristics.
3.5. Firm’s Weaknesses
A bank’s operational weaknesses also result from the state or quality of its organizational
infrastructure. In other words, a bank’s weakness results from the failure of aspects of the
organizational structure to contribute to the successful achievement of some or all of its
organizational goals. It is important for a bank to be alert and look out for this weakness and
eliminate them or reduce their impact on operational goals.
3.6. Profitability
A bank’s performance depends, to a greater extent, on aspects of its organizational

infrastructure. The strengths and weaknesses of the components of this organizational structure
are, thus, responsible for a bank’s cost and revenue performance leading to the firm’s overall
profitability performance.
Annual reports of the banks participating in this study show the pattern of their
profitability for, say, the latest five years. It is this recent profitability performance which is of
importance to the study on hand.
23
3.7. Research Questions
The research questions outline the set of information required to carry the study to a conclusion
based on the current view of the
1. What is the business environment in which Bank of Abyssinia operate?
2. What are the opportunities and threats to banking operation that emerge from the
3. How do Bank of Abyssinia deal with the opportunities and threats confronting their
operations?
4. How does the Ethiopian banks’ efforts in addressing the opportunities and threats that
their operations face impact these banks organizational characteristics?
5. What kind of organizational and operational arrangement and operational service quality
emerge out of the organizational characteristics or conditions?
6. What is the business success of Bank of Abyssinian terms of profitability>what is the

reason for the profitability performance of the bank(s) participating in this study.
24
Chapter Four
4.0. Data Collection Method
This study utilized both primary and secondary sources of data collection for the collection of
relevant information needed in the study. The primary sources were includes questionnaire and
personal interview with the respondents to collect information for the study. The secondary
sources were include journals, articles, magazines, textbooks and literature review and shall
serve as basis of theoretical framework. The research design is the framework analysis and
interpreting the research observation. In actual fact, it will reveal inferences concerning casual
relation and defines the domain of generalizability. Basically, the survey method was utilized as
the basic approach of the study. The method was attempted to be fairly representative of the
population of interest in its selection sample of study. Questionnaire, structured interview and
secondary data are the tools that were used as descriptive survey to obtain desired information.
Osuagwu, L. (2002).
4.1. Population of the Study
To make the research findings more reliable the populations of this research study were proposed
to be the head office staffs of Bank of Abyssinia. The populations of the study are sixty six (66)
and from the total forty (40) of them have taken as a sample using Yamane’s formula. However,
because of the large number of commercial banks in Addis Ababa and the time framework
within which this study is expected to be completed, bank of Abyssinia were selected as a case
study.
4.2. Sample and Sampling Technique
Head office staffs of the bank were chosen as the representative of the population. For this study,
a sample size of 40 respondents is sampled. The 40 respondents were taken randomly on equal
basis from the related departments and branch managers of the bank.
Yamane’s 1967 formula were adapted to determine the representative sample size for the study.
The study was assumed a normal distribution in the responses of the case in relation to their
25
operational activities in the bank. Based on the formula, so there is 66 Administrate employees
(N = 66). At an acceptable 90% level of confidence, and with an error limit of 10%. Adapting
Yamane’s formula, the required sample for the study have determined as:
66
𝑛=
1 + 66(0.1)2
66
𝑛=
1 + 66(0.01)
66
𝑛=
1.66
𝑛 = 40
Where,
n = required response
e2 = limit of error
N = sample size
This means that the lowest acceptable number of responses must be 40 at a 90% level of
confidence with level of error at 10%. However, to strengthen the validity, the study was
distributed questionnaires and conducts an interview for selected employees.
4.3. Sources of Data
The data that were employed in compiling this research study have obtained from primary and
secondary sources. The primary sources of data collection gave the researcher information
directly from the subject being selected. The primary sources of data were conducted through
questionnaire and interview was used to obtain the required data and the area of study. The
secondary source of data is data derive internally base on desk research other soft and hard
materials.
26
Chapter Five
5.0. Data Analysis
5.1. Data Analysis and Interpretation of Results
The focus of this chapter was mainly on the analysis of facts gathered by the research through the
administration of questionnaires. The questionnaires that were mainly administered to Bank of
Abyssinia employees whose are head office staffs the researcher used to gather data in form of
getting the opinions of these respondents on the impact of business environment on organizational
performance. The hypotheses (research questions) formulated and stated were expected to be
subjected to test in order to discuss. This is through the use of scientific analytical tool. The research
was also aimed at towards finding out whether or not business environment has contributed to the
performance or not.
Table 5.1: Demographic Information about the Respondents
Variables No of respondent Percentage

Gender
· Male 18 45%
· Female 22 55%
Total 40 100%
Educational Level
· Diploma 0 0%
· Bachelor degree 13 32.5%
· Masters degree 27 67.5%
· Doctorate degree 0 0%
. Other 0 0%
Total 40 100%
Work Experience
· 0-5 year s 12 30%
· 6-10 years 16 40%
. 11-15 years 8 20%
· Above 15 years 4 10%
Total 40 100%
Age Limit
· 18yrs -24yrs 2 5%
· 25yrs – 35yrs 22 55%
· 36yrs – 45yrs 10 25%
· 46yrs – 55yrs 6 15%
· 56yrs & above 0 0%
Total 40 100%
Position in the bank
.Senior Management 10 25%
.Middle level Management 18 45%
27
.NonManagerial level 12 30%
Total 40 100%
Source: Survey questionnaire 2020

The above table has information about the demographic status of the respondents. In the gender
cadre 22 respondents were male representing 55% of the respondents while 18 respondents were
female with 45% which showed that male respondents are the majority.
Chart 5.1: Pie chart on gender combination of the respondent
Gender
Male Female
45%
55%
The educational level responses has that majority of the respondents are with second degree i.e
27 respondents with 67.5% followed by first degree with 13 respondents representing 32.5%, it
is crystal clear that the respondents have what it takes to understand the questions without undue
influence and also know the confidentiality and essence of research hence would not hoard any
information. The implication of this information is that the respondent’s emotional crisis or
trauma is minimal and relatively stable which means they are in best frame of mind to answer
questions without prejudice.
28
Chart 5.2: Pie chart on educational level of the respondent
Doctorate Degree Diploma

0% Education Level 0%
Bachelor Degree
33%
Masters Degree
68%
From the work experience responses, majority of the respondents were found in the range of 6-10
years with 16 respondents representing 40% followed by 12 respondents in the range between 0-5
yearsrepresenting 30%. It can then be deduced that the years of experience in adequate to know,
identify and express the likelihood effect of environmental factors in business survival and
growth.
Chart 5.3: Graph on the work experience percentage of the respondent
Percentage of Respondent
45%
40%
35%
30%
25%
20% Percentage of Respondent
15%
10%
5%
0%
0-5 year s 6-10 years 11-15 years Above 15 years
29
From the age limit responses, the respondents in the age bracket of 25yrs – 35yrs were found to be
the majority with 22 respondents representing 55%, the implication of this is that the respondents
are matured and candid can therefore be given without fear or favor.
Chart 5.4: graph on the age limit of the respondent
Age limit of the respondents

60%
50%
40%
30%
Age limit of the respondents
20%
10%
0%
18yrs - 25yrs – 36yrs – 36yrs – 56yrs &
24yrs 35yrs 45yrs 45yrs above
When we come to the level of position the most of respondents were from middle level
management with a number of 18 or 45% of the total respondent followed by non-managerial
level 12 in number with a 30% of the total respondents. So this implies that most of the
respondents were have good knowledge and understanding about the banking industry and the
business environment.
Chart 5.5: pie chart on the job position of the respondent
Job position level of the respondent

Senior Management Middle Level Management Non Managerial Level
30% 25%
45%
30
The next section presents the results of data analyzed from questionnaires administered in the
field. Questionnaire variables on the business factors that affect organizational performance of
bank of Abyssinia were measured on a five-point Likert scale (1-5), where 1=strongly agree and
5=strongly disagree. Additionally, the effects of those factors on organization’s performance
were assessed using a Five-point scale (1-5).
Statistical analyses performed included Descriptive, percentile, and Rank. The main purpose of
the choice of statistical analysis was to evaluate the most significant factor of the business with a
view to making appropriate recommendations to relevant areas of the bank.
31
CONDITION Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16
STRONGLY
12 11 7 10 14 17 16 14 14 13 10 9 13 16 7 6
AGREE
PERCENTILE 1.48 1.36 0.86 1.23 1.73 2.10 1.97 1.73 1.73 1.60 1.23 1.11 1.60 1.97 0.86 0.74
RANK 11 12 16 13 9 6 7 9 9 10 13 14 10 7 16 17
AGREE 19 21 15 16 13 14 19 10 15 15 15 22 8 19 4 9
Don't know 3 3 4 8 6 5 1 9 2 7 8 4 11 1 7 11
DIS AGREE 3 2 8 4 4 3 3 5 8 2 3 3 6 0 11 6
STRONGLY
3 3 6 2 3 1 1 2 1 3 4 2 2 4 11 8
DISAGREE
PERCENTILE 1.29 1.29 2.58 0.86 1.29 0.43 0.43 0.86 0.43 1.29 1.72 0.86 0.86 1.72 4.72 3.43
RANK 9 9 6 10 9 11 11 10 11 9 8 10 10 8 1 4
TOTAL 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
STRONGLY
14 18 21 17 6 13 8 4 9 19 23 22 16 16 13 10
AGREE
PERCENTILE 1.73 2.22 2.59 2.10 0.74 1.60 0.99 0.49 1.11 2.34 2.84 2.71 1.97 1.97 1.60 1.23
RANK 9 5 3 6 17 10 15 19 14 4 1 2 7 7 10 13
AGREE 15 12 9 13 12 13 16 12 7 11 6 10 16 11 19 10
Don't know 6 5 6 5 7 4 6 5 6 2 4 3 4 8 5 3
DIS AGREE 2 3 2 5 11 3 5 14 13 2 3 0 1 3 1 10
STRONGLY
3 2 2 4 7 5 5 5 6 4 5 3 2 2 7
DISAGREE
PERCENTILE 1.29 0.86 0.86 0.00 1.72 3.00 2.15 2.15 2.15 2.58 1.72 2.15 1.29 0.86 0.86 3.00
RANK 9 10 10 11 8 5 7 7 7 6 8 7 9 10 10 5
TOTAL 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
STRONGLY
13 14 12 15 21 19 16 21 15 15 16 14 16 11 19 17
AGREE
PERCENTILE 1.60 1.73 1.48 1.85 2.59 2.34 1.97 2.59 1.85 1.85 1.97 1.73 1.97 1.36 2.34 2.10
32
RANK 10 9 11 8 3 4 7 3 8 8 7 9 7 12 4 6
AGREE 2 16 17 9 13 8 10 7 19 13 10 15 11 10 6 12
Don't know 11 5 4 9 3 8 5 11 5 7 11 6 9 14 11 6
DIS AGREE 7 1 4 3 1 3 6 1 0 5 0 2 0 2 1 3
STRONGLY
7 4 3 4 2 2 3 0 1 0 3 3 4 3 3 2
DISAGREE
PERCENTILE 3.00 1.72 1.29 1.72 0.86 0.86 1.29 0.00 0.43 0.00 1.29 1.29 1.72 1.29 1.29 0.86
RANK 5 8 11 8 10 10 11 11 11 11 9 9 8 9 11 10
TOTAL 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40
TOTAL
Q49 Q50 Q51 Q52 Q53 Q54 Q55 Q56 Q57 Q58 Q59 Q60 Q61 Q62 Q63
RESPONSES
CONDITION
STRONGLY
15 14 4 3 5 4 10 9 7 4 7 5 16 17 19
AGREE 811
PERCENTILE 1.85 1.73 0.49 0.37 0.62 0.49 1.23 1.11 0.86 0.49 0.86 0.62 1.97 2.10 2.34 100%
RANK 8 9 19 20 18 19 13 14 15 19 15 18 7 6 4
AGREE 15 11 15 15 13 6 6 6 6 10 9 6 13 15 10 760
Don't know 5 9 12 10 8 6 6 6 6 3 4 8 4 3 6 390
DIS AGREE 2 6 6 9 10 20 12 14 13 14 9 11 6 3 3 326
STRONGLY
3 0 3 3 4 4 6 5 8 9 11 10 1 2 2
DISAGREE 233
PERCENTILE 1.29 0.00 1.29 1.29 1.72 1.72 2.58 2.15 3.43 3.86 4.72 4.29 0.43 0.86 0.86 100%
RANK 11 11 9 9 8 8 6 7 4 3 1 2 11 10 10
TOTAL 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 2522
Table 5.2:Percentile and Ranks of business Factors
33
As the above table represents the structured questionnaire were distributed to the total of 40
respondents with a total of 63 close ended questions using 5 point Likert scale and 7 open
ended questions. As the above table of analysis shows The respondent ranked Q27 (the bank
has branches with the highest outreach) as the most influential factor for the performance of
the bank; this is followed by Q28 (the bank has adequate departments and branch facilities),
Q37 (number of customers raises at a reasonably high rate because of the bank’s reliability)
and Q40 (having the most banking experience) respectively. So the above result shows that
the branch of the bank that was allocated is in the most appropriate areas of a business with a
high availability with the understanding of the business environment in such matter the
respondents were also give a high rank to branch facilities that needs for handling the
customer with a higher satisfaction, such facilities also needs a good governance that really
made by strong and adequate departments specially Branch operation and marketing
departments of the bank
The respondent also ranked effective bank security and related issues like protecting its self
from external and internal attacks like from cyber-attacks as the following influential cause of
a high bank performance; this is followed by that small businesses are valued customers of the
bank and a bank performance and its profitability is from the result of the high performance of
its frontline service providers respectively. This indicates that the bank mostly work on the
frontline employees and training and development.
The general public also ranked poor monitoring as the biggest cause of Ethiopian government
housing construction project failure; this is followed by corruption, change in government,
change in project leadership and poor procurement processes respectively.
The top 10 overall rankings for the causes in order of importance (influence) are as follows:
Number of Branches and its moderate facilities, having an adequate managerial departments,
high rate of bank’s reliability and high rate of bank’s security.
In the scale the respondent were strongly disagree with the factor the bank have a regularly
attack from hackers, the bank does not deal with completion successfully and the bank does not
treat other banks as possible partners. So this disagreement represent and indicates that the
bank was working strongly in such areas like dealing with other banks and competing business
34
groups in the industry as a partner and beneficiary way. Next part of this section would have a
deep analysis in each section of the respondent answers and their perceptions that would have a
real understanding.
Table 5.3: Percentile and Ranks of business environment Factors
CONDITION Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13
STRONGLY AGREE 12 11 7 10 14 17 16 14 14 13 10 9 13
PERCENTILE 1.48 1.36 0.86 1.23 1.73 2.10 1.97 1.73 1.73 1.60 1.23 1.11 1.60
RANK 8 9 13 10 3 1 2 3 3 6 10 12 6
AGREE 19 21 15 16 13 14 19 10 15 15 15 22 8
Don't know 3 3 4 8 6 5 1 9 2 7 8 4 11
DIS AGREE 3 2 8 4 4 3 3 5 8 2 3 3 6
STRONGLY
3 3 6 2 3 1 1 2 1 3 4 2 2
DISAGREE
PERCENTILE 1.29 1.29 2.58 0.86 1.29 0.43 0.43 0.86 0.43 1.29 1.72 0.86 0.86
RANK 3 3 1 7 3 11 11 10 11 3 2 7 7
TOTAL 40 40 40 40 40 40 40 40 40 40 40 40 40
Here the respondents strongly agreed up on Q6 (the community consists of trusting customers in
bank service). This indicates the banks was finding a good strategy in showing the security and the
reliability of the banking service and create a good image on the mind of the customers. The
respondent were also ranked Q7 (the bank is supported by the growing national economy) putting
after Q6. It implies that the current position of the country’s economic trend have a good
contribution for the industry. In addition to the positive the respondents were strongly disagreeing
up on Q3 (government policy encourages unrestricted banking operations) this indicates the policy
applied by the government was mainly restricting the operations of the bank like the directives
given by national bank and not giving a full of support to the banking sector. So it directly affects
the performance of the bank as well as the entire industry in order to make a good return and take
the advantage over other lateral industries.
35
Table 5.4: Percentile and Ranks of Business Opportunities
BUSINESS OPPORTUNITIES
STRONGLY
STRONGLY AGREE AGREE Don't know DIS AGREE TOTAL
DISAGREE
Q14 16 19 1 0 4 40
Q15 7 4 7 11 11 40
Q16 6 9 11 6 8 40
Q17 14 15 6 2 3 40
Q18 18 12 5 3 2 40
Q19 21 9 6 2 2 40
Q20 17 13 5 5 0 40
Factors like correspondent banks partnership, software’s and computer based modern banking
system have a first place in taking and dealing with a business opportunities and the respondents
have given the first rank. It indicates the bank mainly use a moderate computer based access to
facilitate its operation so such factors have a strong effect on the performance of the organization
because in current time the first competition way is giving a fast and reliable service using a
computerized service to the customers as they are a valued asset of the bank.
Table 5.5: Percentile and Ranks of Business Threats
BUSINESS THREATS
STRONGLY STRONGLY
AGREE Don't know DIS AGREE TOTAL
AGREE DISAGREE
Q21 6 12 7 11 4 40
Q22 13 13 4 3 7 40
Q23 8 16 6 5 5 40
Q24 4 12 5 14 5 40
Q25 9 7 6 13 5 40
The above table shows that the respondents answer over the threats that the organization can face
throughout its life, as it’s indicate most of the respondent agreed up on Q21, Q22, Q23. In general
36
an aggressive competition, the new entrants and the relationship of staff’s turnover and short term
financial benefits of employee have ranked first on the base of respondents response. This
indicates those factors have a common impact on the survival of the bank if such things are
happened the employees’ turnover rate gets increased and to survive in the aggressive competition
is so difficult.
Table 5.6: Percentile and Ranks of Organizational Infrastructure
ORGANIZATIONAL INFRASTRUCTURE
STRONGLY
DISAGREE
Q26 19 11 2 2 6 40
Q27 23 6 4 3 4 40
Q28 22 10 3 0 5 40
Q29 16 16 4 1 3 40
Q30 16 11 8 3 2 40
Q31 13 19 5 1 2 40
Q32 10 10 3 10 7 40
Q33 13 2 11 7 7 40
Q34 14 15 5 1 4 39
Q35 12 17 4 4 3 40
Q36 15 9 9 3 4 40
Q37 21 13 3 1 2 40
Q38 19 8 8 3 2 40
Factors like many outreach branches, well organized head office, the size of the bank, the
qualification of staffs, financial resource, service quality, service reliability, bank security and
moderate computerized operating systems have a first place in organizational infrastructure and the
respondents have given the first rank with a strong agreement. It indicates the bank mainly use a
moderate computer based access to facilitate its operation so such factors have a strong effect on
the performance of the organization because in current time the first competition way is giving a
37
fast and reliable service using a computerized service to the customers as they are a valued asset of
the bank. It also indicates the bank focused on customer service in order to have a long term life
and a strong good will and stay in a business with different financial resources and having a
secured operation and opening new branches with a qualified staffs.
Table 5.7: Percentile and Ranks of Firms Strengths
FIRMS STRENGTHS
STRONGLY
DISAGREE
Q39 16 10 5 6 3 40
Q40 21 7 11 1 0 40
Q41 15 19 5 0 1 40
Q42 15 13 7 5 0 40
Q43 16 10 11 0 3 40
Q44 14 15 6 2 3 40
Q45 16 11 9 0 4 40
Q46 11 10 14 2 3 40
Q47 19 6 11 1 3 40
Q48 17 12 6 3 2 40
Q49 15 15 5 2 3 40
Q50 14 11 9 6 0 40
The firm or the bank has its own strength that can make it out fitted in the business world and it is
one of a business factor or capability that a bank received and control external and internal
business opportunities and threats. In this section of the questioner the respondents almost all were
agreed on the factors such as on the incentives enjoyed by the employees of the bank, the age of
the bank, front line service, the security strength in the case of cyber-attack, the ethical manner of
the staffs and the relationship among the bank and its compotators. This factors are the main
indicators of an internal strength of the bank…, one of the indicator of organizational performance
is the SWOT analysis, then this factors reflects the bank has a good internal capability over
38
controlling the issues raised from outside the organization in fact this all strengths also reflect the
strength of the staffs and the education level of their experience too. It initially comes from the
motivational factor that applied by the bank, in today’s scenario the money factor is the best
motivational factor that some business can applied for their employees with including a benefit
packages.
Table 5.8: Percentile and Ranks of Firm’s Weaknesses
FIRM’S WEAKNESSES
STRONGLY
DISAGREE
Q51 4 15 12 6 3 40
Q52 3 15 10 9 3 40
Q53 5 13 8 10 4 40
Q54 4 6 6 20 4 40
Q55 10 6 6 12 6 40
Q56 9 6 6 14 5 40
Q57 7 6 6 13 8 40
Q58 4 10 3 14 9 40
Q59 7 9 4 9 11 40
Q60 5 6 8 11 10 40
The above table shows that the respondents answer over the weaknesses that the organization can
experience throughout its life, as it’s indicate most of the respondent disagreed up on Q54, Q55,
Q56, Q57, Q58, Q59 and Q60. And the respondents agreed up on Q51, Q52 and Q53. In general a
weak measures over external, internal and cyber-attacks, ineffectiveness of training and
development of staffs with a full of responsibility and ethics have ranked first on the base of
respondents response. This indicates those factors don’t have an impact on the survival of the bank
because the bank is deal with such issues in effective way but the first three factors (Q51, Q52,
Q53) were rise the respondents acceptance as an impact in the bank’s performance. This indicates
39
a slow action over the bad debt and as a result if the bank doesn’t deal with competition
satisfactorily and if such things are happened it will have an impact on company’s survival.
Table 5.10: Percentile and Ranks of Firm’s Profitability
PROFITABILITY
STRONGLY STRONGLY
AGREE Don't know DIS AGREE TOTAL
AGREE DISAGREE
Q61 16 13 4 6 1 40
Q62 17 15 3 3 2 40
Q63 19 10 6 3 2 40
The profitability factor indicates that there is a direct relation with bank’s performance if there is a
chance of profitability it is from a direct effect on the performance. The last close ended questions
also described that the combined effort of the managerial level (leadership) and the frontline staffs
have an effect on the profitability of the bank. If their contribution is high there will be a high
performance and have a result of profitability. So such results initially come from the good
governance and motivations of the staffs in every direction.
40
Chapter six
6.0. Study findings
This chapter presents the main findings of this study based on the research aims and objectives.
It highlights the main contributions and the limitations of the study. Further, it makes suggestions
for further research in the subject area. The purpose is to shed light on the main findings of the
research, and contribute to both the academic and practical fields.
As a result of the finding with respect to the research question and its objective the researcher
have dig so more information and analyze it in a very good manner. So the researcher have find
the operating environment of the bank with different external and internal factors that can
influence the survival of the organization like the government regulations and interventions, the
compotators, shifting of customers and the staffs to get an excellentand quality service and good
payment respectively. Those factors and the structured questionnaire contribute to answer the
first question of the research as well as the first specific objective too.
The finding also addresses the main threats and opportunities of the bank by open ended
structured questioner and interview. In this section the bank were have a specific threats with a
good performance in handling those business environment threats and opportunities. So it
indicates that in such threats like new entrant of the firm in the sector were have small amount of
effect on the bank because the bank has its own proactive strategy for such a thing. Actions like
handling customers with a high quality of service, high rate of security and reliability are some
measures taken by the bank in order to make their customers stay with them for long. As it has
much more years in the sector and being a popular bank in Ethiopia with so many outreach
branches it can represent other banks effectively. These findings have answered the 2nd, the
3rdand the 4thquestions and attain the objectives too.
The organizational arrangements and infrastructural service quality indicates the bank has a
strong understanding over the management practices and the motivational skills. In the interview
section the respondents specially indicates that the managerial skills and technical understanding
of the business environment is fantastic and it will have a positive impact on the result of the
bank’s profitability. With having a direct relationship among performance and profitability the
bank is give attention and focused on the daily performance of its operation in order to achieve a
41
nice reward so the finding indicates that the bank considers profitability as a result of a good
performance and it also answered the last two questions of the research.
Generally the findings were reflects that any business have its own strength and weaknesses that
confronts with business opportunities and threats but the major thing here is using the final and
pick effort in handling those good and bad chances. The next section have discussed with the
conclusions and giving some recommendations over the findings
42
Chapter Seven
7.0. Conclusion and Recommendation
7.1. Conclusion
On the basis of the research findings, the existing business environment factors in the bank were
identified together with their respective significance impact or effect in the wake of survival and
growth of the bank of Abyssinia. Factors such as Organizational policy, competition, technology,
infrastructural facilities, capital, government policies, financial credits, fraudulent practices were
found to show a direct significance in their relationship effect while inflation, raw materials and
government politics were found to indicate indirect significance in their relationship effect. It is
however crystal clear that all these factors identified were found to be challenges to the survival
and growth of the bank and where adequate attentions are not paid to these factors, it would
definitely impede the survival of the bank thus making the growth impossible and where it is
possible to be at snail pace.
This study was focused on the impact of business environment on organizational performance, it
is important for the management to check the relationship between the workers; employees and
their customers. In the absences of good organizational policies, the productivity level could be
affected and it may also hinder the performance of the workers. There is need for motivation on
the part of employees. However, it is necessary to consider the effect of the research on Bank of
Abyssinia as the sample or case study. The conclusion gathered from the study is that:
Environmental factors, which are the basic problems which business faces, should be
well tacked. It will help to build the relationship between the management, workers and
customers.
From the analysis made in the study, it will be suitable to improve on management level,
worker welfare, consider business policies, well trained or educated and finally improve
on the technological advancements used for business.
This research will help in adding to knowledge of people in business. People could use
some analysis/techniques in the research to solve certain problems they might face in
their business.
43
Knowing that business effectiveness cannot be ascertained, the research will help the
company to ascertain or achieve effective performance, through the use of some of the
techniques.
The research has shown that there is a relationship between business and environment.
7.2. Recommendations
Evolving from the above discussion, it is the opinion of the researcher that if the following
recommendations can be used as a blueprint towards providing a lasting solution to the survival
and growth in the performance of a business organization in the sector, it would be achieved in a
time not far from now;
That the government of the day should endeavor to create an enabling environment that
would be truly conducive for business organization (specially banking sector) to thrive
without engaging in any act of fraudulent practices.
That management of the bank should constantly scan the environment in order to
understand the major trends of events and make proactive decisions that would neither
jeopardize nor mortgaged the future of the organization.
That the government of the day should make the business organization in the sector to
enjoy certain tax rebate as a result of prevailing economic condition under which they
conduct their businesses.
That provision and maintenance of all infrastructural facilities should be of paramount
importance in order to avoid complete decadence as it is found in the different branch
areas of the bank, at the same, new one should be introduced to move with pace of
technological advancement where necessary. Utmost premium should be placed on this
for meaningful survival and growth of business in this sector.
That bank should be strengthened in order to make loan available to business
organizations so as to position these business organizations in such a way that availability
of funds would not endanger the smooth operations of this organization.
In order to reduce uncertainty in the environment, the following recommendations are therefore
suggested:-
44
The bank should improve on their motivational level, since it is obvious that a reward
tends to increase the performance of workers. The management should try to make their
workers comfortable.
Manager should be properly trained, so as to enable good supervision of their employee’s
job. The manager tends to have the ability to control, plan and organize his or her
company, when they are well trained for the task.
The management should remember to give benefits to workers who are entitled to it; it
will encourage the workers to take their job as important as possible. The management
should also decentralize power or authority; they should learn to listen to workers opinion
because it allows for cordial relationship.
Finally, the organization should learn to consider government policies or regulations.
This will help to build the business since profit margin of the company will not be
hindered by the regulation.
7.3. Recommendations for Further Research
With respect to some limitations in the course of the research work, the following are considered
as areas that can be further researched into in the nearest future;
Evaluation of the environmental factors influence on the survival and growth of a
business using econometric models.
Correlation study of internal environmental factors of business and business survival.
45
References
Akanji, S.O (2003). Business Environment in Nigeria, Mushin-Lagos: Datfore Ltd. pp. 25-40.
Babalola, O. & Abel, S. (2013). ‘‘Business Environmental Factors: Implications on the Survival
and Growth of Business Organizations in the Manufacturing Sector.’’ Business and
Management Research journal, 2(3), pp. 146-155.
Gloria, O. (2015). ‘‘Impact of business environment on organization performance in Nigeria.’’
European scientific journal. pp. 478-494.
Harrison, F. (1996). Policy, Strategic and Managerial Action, Boston; Houghton Migglin Press.
Nnamani, E. and Ajagu, H. (2014) ‘‘Environmental Factors and Organizational Performance in

Nigeria’’ World Engineering & Applied Sciences Journal. 5(3). pp. 75-84.
Kaplan, Robert S. and David P. Norton. (2008). The Execution Premium Linking Strategy to
Operations for Competitive Advantage, Amsterdam: Harvard Business Press.
Kurte, D.L., and Boone, L.E. (1987). Management in Focus; New York: Random House
Incorporation.
Ridwan I. and Ina P. (2015). ‘‘Influence Business Environment on the Organization

Performance.’’ International Journal of Scientific & Technology Research. 4(4). pp.
283-293.
Wright, Peter, Parnell, Mark, J.Kroll, John. (1998). Strategic Management Concepts and Cases,
6th ed. Brussels: world press.
Yalokun, J. (1998). Fundamental Management and Practice, Lagos: University of Lagos press.
pp. 52-75.
46
Appendices
Appendix I: Budget/ Cost for the Study
NO ITEM QUANTITY UNIT COST TOTAL COST

(in birr) (birr)
FACILITY COSTS
1 FOR STATIONARY MATERIALS
✓ PAPER 3 pad 95 285
✓ PEN 5 5 25
✓ PENCIL 3 2 6
2 SECRETARY 45 5 225
3 PRINTING 195 2 390
4 PHOTO COPIES 400 1.5 600
5 BINDING 2 10 20
DATA COLLECTION COSTS
7 TRANSPORTATION COST 20 15 300
8 MISCELLANEOUS EXPENSES 60 60 60
TOTAL COST 1,911
i
Appendix II: Time/Work Schedule
The study cannot complete within day driven with specific weeks as it involves the researcher
activity level. The study will be able to clearly planning allocated little time for each activity that
will be ruder taken. The following work plan is designed for successful completion of this study
within available time.
Time period (in month), 2020 G.C
NO ACTVITY JAN FEB MAR APR MAY JUNE JULY

1 Title collection ✓
2 Literature ✓
finding
3 Proposal dev.t ✓
4 Data collection ✓
5 Proposal ✓
submission
6 Data analysis ✓
7 Report writing ✓
8 Paper ✓
submission
9 Presentation ✓
ii
Survey Questionnaire
On
Business environment and Organizational Performance
The survey collects information for conducting the research “Impact of Business Environment on
Organizational Performance in Ethiopia: A Case of Bank of Abyssinia.’’ Data collected in the
survey is intended for academic purposes only and will be used confidentially.
The survey also will be used in partial fulfillment of master of business administration research.
iii
Section I: General Information
Place an X mark in the box provided as your answer.
1. Gender:
Male [ ]
Female [ ]
2. Age
18-24 [ ]
25-35 [ ]
36-45 [ ]
46-55 [ ]
Above 55 [ ]
3. Highest level of Education
▪ Diploma [ ]
▪ Bachelor Degree [ ]
▪ Master degree [ ]
▪ Doctorate degree [ ]
Other (Please specify) ________________________________________
4. Please indicate your position at the bank
1. Senior Management [ ]
2. Middle level Management [ ]
3. Non Managerial Level [ ]
iv
5. Years of experience in your bank
▪ 0-5 year [ ]
▪ 6-10years [ ]
▪ 11–15years [ ]
▪ Above 15 years [ ]
Section III:
In the following scaled table, respond to the statements by selecting the right number response.
The number corresponds to the following legend:
1 = Strongly agree
2 = Agree
3 = Do not know
4 = Disagree
5 = Strongly disagree
For your response, place an X mark in the box under the number you selected “The bank” in this
questionnaire refers to “the bank of Abyssinia.”
Section II
Business Environment
Sr.No. Statements 1 2 3 4 5
1 The government provides full support to the banking sector
2 Government policy favors government banks over private banks
3 Government policy encourages unrestricted banking operations
4 Banking legislation empowers to Take immediate action on
defaulting borrowers
5 Increasing population provides more potential customers
6 The community consists of trusting customers in bank services
7 The bank is supported by the growing national economic
8 The bank positions itself to correct problems of the growing
national economy in the case of inflation and other issues
9 The bank depends on the expanding higher education system for
recruiting employees
v
10 The bank takes active steps to attract professionals and skilled
labor from other banks
11 The bank loses professionals and skilled labor to other banks
12 More cyber attackers emerge as banks emerge and expand
13 Deposits tend to be stolen as banks expand their services
Opportunities
14 There is an increasing number of emerging big businesses that
borrow from the bank
15 The bank is regularly attacked by hackers
16 The bank has suffered from deposit theft a few times

17 The bank successfully handles and benefits from new
opportunities
18 Small businesses are valued customers of the bank
19 The bank is a major user of, and beneficiary from, the application
of computer-based banking
20 The bank has gained partnership wihe a good number of
international partners
Threats
21 Fierce competition is negatively affecting the bank’s
performance
22 As new bank’s emerge, the bank’s staff turnover increase
23 New recruits give more priority to their own short-term financial
benefit and do not develop commitment to the bank despite the
heavy and expensive training they receive
24 The bank’s security is continuously threatened from outside
25 The bank’s security is continuously threatened from inside
Organizational Infrastructure
26 The bank has a well-organized head office
27 The bank has branches with the highest outreach
28 The bank has adequate departments and branch facilities
29 The bank is a relatively large bank
30 The bank has sufficient financial resources
31 The bank has qualified staff
32 The bank suffers from high turnover of management staff
vi
33 The bank suffers from high turnover of lower level staff
34 The bank has both traditional and computer-based products
35 The bank has both traditional and computer based bank services
36 Number of customers raises at a reasonably high rate because of
the bank’s quality services
the bank’s reliability
the bank’s security
Firm’s Strengths
39 The incentives enjoyed by employees are unique to this bank and
not available to their respective employees in other banks
40 The most banking experience
41 Provides incentives to its employees that help them enjoy a high
quality of life
42 The bank’s incentives keep employees committed for a relatively
long time
43 The frontline service providers treat customers with reasonably
high respect
44 The bank deals with competition successfully
45 The bank takes strong measures to protect itself from external
security attacks on its deposits
46 The bank takes strong measures to protect itself from internal
security attacks on its deposits
47 The bank takes strong measures to protect itself from cyber
attacks
48 The bank is quite successful in training its frontline employees to
be highly responsible
49 The bank is quite successful in training its frontline employees to
serve customers in an ethical manner
50 The bank considers other banks more as partners rather than

competitors
Firm’s Weaknesses
51 Bad debts keep rising due to slow actions due to the bank’s low
action to check them
vii
52 There are times when the bank lends money to entities not
considered to be credit worthy.
53 The bank does not deal with competition satisfactorily
54 The bank does not take strong measures to protect itself from
external security attacks on its deposits
internal security attacks on its deposits
cyber attacks
57 The bank is not quite successful in training its frontline
employees to be highly responsible
58 The bank is not quite successful in training its frontline

employees to serve the bank’s customers in an ethical manner
59 The bank does not deal with completion successfully

60 The bank does not treat other banks as possible partners
Profitability
61 The bank’s profitability is a result of the high performance is due
mostly to the high performance of its management
62 The bank’s profitability is a result of the high performance of its
frontline service providers
63 Management’s performance contributes more to profitability
than that of the frontline service providers
Section III:
Respond briefly to the following questions or statements in the space provide:
1. What are the business environment factors that affect the bank? In what way?
-
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
viii
2. From what opportunities has the bank benefitted?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
3. What threats has the bank faced? Suffered from?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
4. What improvement is helpful to the bank’s organizational structure, branch facilities,

banking products and services?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
5. What are the major strength’s of the bank?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
6. What are the major weaknesses of the bank?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________
ix
7. What business environment factors to the profitability of the bank… In what way?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________

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Impact of Business Environment on Organization Performance in Ethiopia:

The Case of Bank of Abyssinia.

Alpha University College

Addis Ababa, Ethiopia

The Case of Bank of Abyssinia.

By: Selome Lemma

Advisor: Tadesse Negash (phD)

A Thesis Submitted to the Graduate Studies of Alpha University College

Alpha University College

Addis Ababa, Ethiopia

Advisor: Tadesse Negash (phD)

the Board of Examiners

the Management Department

of the School Of Graduates Studies

“Impact of Business Environment on Organization Performance in Ethiopia:

The Case of Bank of Abyssinia.’’

Selome Lemma Bizuayehu

The Examining Board

______________________ _______________________ __________________

Name of external examiner Signature Date

______________________ _________________ ___________________

Name of internal examiner Signature Date

______________________ __________________ ____________________

Departmental approval Signature Date

____________________ ____________________ ____________________

Contents .................................................................................................................................................. vii

Table 5.1Demographic Information about the Respondents___________________________28

Table 5.3:Percentile and Ranks of business environment Factors___________________35

Table 5.4: Percentile and Ranks of Business Opportunities________________________36

Table 5.5: Percentile and Ranks of Business Threats_____________________________36

Table 5.6: Percentile and Ranks of Organizational Infrastructure___________________ 37

Table 5.7: Percentile and Ranks of Firms Strengths______________________________38

Table 5.8: Percentile and Ranks of Firm’s Weaknesses___________________________39

Table 5.9: Percentile and Ranks of Firm’s Profitability___________________________40

Chart 5.5: pie chart on the job position of the respondent_________________________28

Chart 5.4: graph on the age limit of the respondent______________________________29

Chart 5.3: Graph on the work experience percentage of the respondent______________29

Chart 5.2: Pie chart on educational level of the respondent________________________30

Chart 5.1: Pie chart on gender combination of the respondent_____________________ 30

No business organization can operate successfully in isolation without dependence on supportive

1.2. Statement of the Problem

What is the business environment in which Bank of Abyssinia operate?

1.4. Objectives of the Study

1.4.1. General Objective

1.4.2. Specific Objectives

Specifically, the study was intended to achieve the following objectives:

To identify the business environment in which Bank of Abyssinia operate.

1.5. Scope/Delimitation of the Study

1.6. Limitations/Constraints of the Study

1.7. Significance/Contribution of the Study

A number of researchers have proposed various models of strategic management.

An important role of organizational performance to support business processes have

Furthermore, the measurement of the performance of the balanced scorecard approach to

2.2.1. Financial Perspective

Furthermore, the application of the balanced scorecard to measure the performance of a

2.2.2. Customer Perspective

2.2.3. Internal Business Perspective

2.2.4. Learning and Growth Perspective

__________ _ ________

______________ _ ___________