Influence of External Environmental Factors on the Performance of Access Bank PLC

Influence of External Environmental Factors on the Performance of Access Bank PLC

ECHO Orinya Christopher
Department of business management, Faculty of management sciences, Benue State University, Makurdi, Nigeria

DOI: https://doi.org/10.47772/IJRISS.2023.7456

 Received: 20 March 2023; Revised: 04 April 2023; Accepted: 07 April 2023; Published: 05 May 2023

ABSTRACT

The study investigated the influence of external environmental factors on the performance of Access Bank Plc. Specifically; it examines the effect of economic and technological factors on the performance of Access Bank Plc. The study utilized the survey method. A sample size of 226 was obtained using Krejcie and Morgan sample size determination table from a population of five hundred and eighty-two (582). Structured questionnaire was used to obtain data from respondents. Construct and face validity were used to establish the validity of measurements. The analysis was based on 196 copies of returned questionnaires representing 87%. Descriptive statistic, the Jacque Bera normality test, Correlation and OLS multiple regressions were used to analyze the data. Findings revealed that economic and technological factors have significant and positive relationship with the performance of Access Bank Plc. The study concluded that that environmental factor is a significant predictor of the performance of Access Bank Plc and that not all external environmental manifestations negatively impact organizational activities. The study recommended the need for government and various policy makers to put in place policies that will improve the economic condition surrounding the banking industry as it will further strengthen customers’ trust and build confidence in the financial sector in the country. It also recommends that prompt knowledge of new technologies be adapted by the bank as it will go a long way in enhancing quality service delivery and customer satisfaction.

Keywords: Influence, External Environment, Performance, Access Bank Plc.

INTRODUCTION

The environment in which businesses exist in the 21^st century has become increasingly multifaceted, dynamic and complex due to technological advances, globalization and well-informed customers. Given the fact that no business exists in a vacuum, it is imperative for a company to be fully aware of what factors exert impact on its activities and operations. Some factors influence the performance of business directly while some other factor influence is only indirect. Muiruri (2012) noted that the factors in the environment can either produce positive or negative effects depending on the resources available at a company’s disposal, the magnitude and level of control of these factors. Nonetheless, it is essential for companies to be prepared and proactive by analyzing trends and future outlook in the environment. This can be achieved through the development of sound strategic plans to take advantages of environmental opportunities while cushioning adverse effect of environmental threats.

Internal and external environmental elements essentially fall into two broad areas that influence an organization’s performance. The internal determinants, which fall under management’s purview, comprise elements of the marketing mix, organizational culture, employee demographics, and hiring practices, as well as variables like liquidity, investment in securities, loans, non-performing loans, overhead expenses, and organizational resources. Savings, current account deposits, fixed deposits, total capital, capital reserves, and money supply are additional factors that significantly impact profitability. Similar to internal determinants, external determinants include variables including cultural, social, economic, technological, legal, and demographic ones that are beyond of the management of these institutions’ control.

The banking sector has undergone a tremendous transition over the years as a result of internal and external causes, including, among others, changes in business models, the adoption of cutting-edge technologies, and shifting regulatory regimes. The current banking industry is a very complex ecosystem where different players, such as startups, tech businesses, and internet companies, have a growing influence. Since the National Economic Empowerment and Development Strategy (NEEDS) program, which sought, among other things, to re-capitalize financial institutions, develop a competitive and healthy financial system capable of supporting economic development, address incidences of systemic distress in the financial sector, among other things, Chidozie and Ayadi (2017) stressed that the Nigerian banking industry has been prone to major macroeconomic shocks. This resulted in an increase in the minimum required capital for banks.

In order to increase the productive potential for economic growth and development, the banking sector channels idle cash from the surplus units to the deficit units, particularly business businesses (Saona, 2011). The primary purpose of deposit mobilization and credit expansion is to facilitate economic growth by lubricating the gears. operations (Sumaila, 2015; Udom & Onyekachi, 2018). The banking system liability functions as a medium of exchange for the payment process. The nation’s monetary policies are carried out by banks, who act as actors in this process.

 Despite the facts that the banking industry affects every facet of a nation’s economic activities it is subservient to some exogenous and endogenous factors that impinges on their ability to meet stated objectives which goes a long way in determining performance and long-term survival.

Organizational performance is a concept that is viewed from different perspectives. In simple terms, Richardo (2001) conceptualized It refers to an organization’s capacity for achieving its aims and objectives. However, as it relates to the banking industry the universal measure of performance is mostly viewed as profitability ratios, like (Profit margin, return on assets return on equity, and return on sales). However according to Hoque (2005), banking performance is more often attributed to greater execution than to structural hurdles to competition. Hence, banks should place a higher emphasis on strategically addressing all non-financial aspects that are related to their overall mission and vision.

The performance of banks has been a subject of keen interest in economic literature due to the vitally important role they play in an economy. There have been research doneto investigate the factors responsible for the performance of banks both in developed and developing economies around the world (for instance, Ani, Ugwunta, Ezeudu  & Ugwuanyi, 2012; Çekrezi, 2015; Heikal, Khaddafi & Ummah, 2014). However, a thorough examination of these studies reveals that focus is usually on financial measures such as liquidity, capital adequacy, interest rate, return on asset, and net interest margin. This means that the non-financial aspects of performance monitoring in banking and financial institutions have not attracted the attention of many studies. This industry is unique in that it places a great priority on financial data, and as a result, its performance evaluation system heavily relies on financial ratios and indicators (Marie, Ibrahim & Al- Nasser, 2014).

Akter, Hoque and Chowdhury (2016) contend thatit is crucial to take non-financial aspects into account banking industry to successfully develop further. that determines performance.  It shows that there isn’t enough information about when and how non-financial measures can enhance organizational performance. In light of this, the goal of this study is to close some knowledge gaps about the non-financial indicators and performance measuring techniques utilized by banking and financial institutions. in an emerging economy like Nigeria. To this end, the study empirically investigates the influence of external environmental factors as proxied by economic and technological factors on qualitative measurement of performance of Access Bank Plc.

Statement of the problem

The extraordinary and constantly changing environmental forces that businesses face today have made it challenging for any organization, regardless of industry, to thrive and achieve their short-and long-term corporate objectives. New technologies, sophisticated customers, globalization, economic depression, industry convergence and most recently, Covid-19 and Several Chief Executive Officers have been affected by different elements that collectively have changed the business climate.

Over the years, the operational and structural inadequacies that have characterized the Nigerian banking industry have necessitated the need for several reforms over time. Gidigbi (2017) noted the five phases of banking reforms in Nigeria. However, in spite government intervention, regulatory and supervisory role through the Nigerian Central Bank (CBN)and other related agencies, banks have continually struggled with declining operating profitability, sluggish credit growth, fast asset quality deterioration and weak capitalization putting increasing pressure on their credit profile. For instance, the decision of the CBN in consultation with Nigeria Deposit Insurance Corporation to address Skye Bank’s distress via the establishment of Polaris Bank has not yielded much effort. This is because CBN in its recent review of commercial banks performance revealed that three commercial banks failed to meet its minimum liquidity ratio of 30% in 2018 (Ojekunle, 2019). It stands to reason then that the issue seems to lie within some environmental factors which have not been taken into cognizance.

Based on observation, it is becoming more common in the Nigerian banking sector where banks that seem to be performing well in previous years as stated in their published financial statements all of a sudden find themselves in distressing situations. This seems to suggest that financial measures of performance only account for one side of the coin in the indicators of organizational performance. Hence, non-financial performance measurement may provide sound explanations for this phenomenon.

Furthermore, banks seem to be at the whims of economic factors such as inflation rates which can devastate profitability prospects of banks due to its effect on the value of currency. It is worthy to note that Nigerian banks have been experiencing issues brought on by a protracted slowdown in economic activity, severe political instability, a surge in contemporary technology, virulent inflation, deteriorating financial conditions for their corporate borrowers, and rising instances of fraud and misappropriation of cash. The inconsistency of monetary and regulatory policies is another significant problem that banks have had to deal with. Unfortunately, the CBN’s regulatory and surveillance procedures have not been able to keep up with the speed of change in the world financial system. Based on the aforementioned, this study aims to investigate how external environmental elements in Access Bank Plc affect organizational performance.

Objectives of the Study

The main objective of this study is centered on the effect of external environmental factors on the performance of Access Bank Plc. To achieve this broad objective, the specific objectives are to:

1. Evaluate the effect of economic factors on the performance of Access Bank Plc
2. Ascertain the effect of technological factors on the performance of Access Bank Plc

Research Questions

1. To what extend does economic factors affect the performance of Access Bank Plc?
2. How does technological factor influence the performance of Access Bank Plc?

Research Hypotheses

To guide data collection and analysis, the researchers made conjectural statements about the expected relationship of the research variables as follows:

Ho₁:  Economic factors have no significant effect on the performance of Access Bank Plc.

Ho₂: Technological factors have no significant effect on the performance of Access Bank Plc.

LITERATURE REVIEW

External Environment

The factors or influences that have an external impact on an organization’s operations are referred to as its external environment. They consist of technological dynamics, social and cultural values, political climate, government policy, and economic dynamics (Alkali & Abu, 2012; Pearce & Robinson, 2007 and Beal, 2000). Ehlers and Lazenby, (2011) elucidate how the external environment embodies the environmental factors that have an impact on an organization’s performance both directly and indirectly. There is no denying that the environment has a significant impact on a firm’s performance. Even with a behavioral approach, an entrepreneur’s motivation, personality, and attitudes are influenced by their environment (Gartner, 1985). The external environment consists of a variety of elements, including sociocultural, political, technological, and economic ones (Ehlers & Lazenby, 2011).

Only two dimensions of external environment (economic and technological factors) are considered for the purpose of this study

Economic Factors

Omobolanle (2009) defines the economic environment as all those variables, including inflation, currency rates, unemployment rates, and others, that have an impact on how well an organization performs. In other words, the economic environment refers to those economic elements, such as the inflation rate, exchange rate, interest rate, and employment, that either directly or indirectly influence how businesses operate in Nigeria. Governmental actions, tax rates, and monetary policies are examples of other economic influences. These variables affect future investment value even when they have no immediate impact on business.(Sargolzaee, Rahbar, Khalighi & Ahmad, 2016).

Regarding the banking industry, however, when the economy is in disarray, bank managers’ capacity to forecast returns with accuracy will be hampered, leading to more cautious lending behavior across all banks. The macroeconomic environment has a significant and disproportionate impact on business finance, according to Schwienbacher, Armin, Larralde, and Benjamin (2010). Business finance is impacted by market expectations, the state of the stock market, the health of the wider economy, and monetary policy. Thus, the economic environment in this study is defined as the entirety of economic variables that affect bank operations, including unemployment, income, inflation, interest rates, productivity, and gross domestic product (GDP) (Access Bank Plc).

Technological Factors

One of the most important and fundamental components of efficient management in a business is technology. Technology is the methodical application of structured scientific or other information to real-world tasks. It can also be described as a body of knowledge that is applied to the production of goods and services, the development of skills, and the extraction or collection of materials. Technology is defined by Drucker (1970) as “the systematized practical knowledge, skills, procedures, actions, and objects through which man pushes back his boundaries and develops his capability” in Onuoha (2012). Business managers must be always vigilant to accept new technologies in their organizations if they are to keep up with the rapid developments in technology.

The term “technological factors” refers to a collection of variables that influence an organization’s production strategy and the level of demand for its goods. Similar to this, Gamble (2014) claimed that technology forces refer to the speed at which science is evolving and how quickly technology is developing, both of which have the potential to have significant effects on society. Babatunde and Adebisi (2012) further noted that technological factors also take into account aspects of technology such as R&D activity, automation, technology incentives, and the rate of technological change. Technological changes can also influence costs, quality, and spur innovation. Similarly, technological advancements have an impact on the opportunities and difficulties that the organization faces. One of these effects is the alteration on demand brought on by technological advancement. The organization cannot survive unless there is an effective production and management technology (Grubich & Shrolik, 2015).

The organization’s ability to adapt and exploit new sciences and ideas that are emerging in diverse sectors of knowledge is supported by technological aspects. Technology is a crucial component in improving an organization’s ability to compete as it seeks to continuously improve its services and products, resulting in the longevity and success of the company. Ismail, Hani and Mohammad (2020) argued that technological influences include expenditure on R&D, concentrating on technological progress in the industry, innovation, technology transfer, life cycle, and rapidity of technological changes. Redesigning products and processes, investing in new technology, and spending on research and development are some of the key approaches to guarantee steady performance. (Epstein & Roy, 2001).

Information technology is a significant component of technology in the modern corporate environment. Information technology (IT) is a word that, according to Johnson and Scholes (2007), broadly refers to the use of electronic technology to meet the information needs of business at all levels. Information is stored, processed, and disseminated via a computer-based system and communication technologies. The corporate landscape has seen a significant transition thanks to the development of information technology (IT) and related technology. Companies like banks continue to make substantial expenditures in IT in an effort to take advantage of every opportunity to increase their competitive edge, including IT. According to Chen, Liang and Lang (2006) The principles of businesses are being redesigned, and a substantial portion of corporate processes are now reliant on IT. According to Dangolani (2011), banking has mostly exploited information technology in two major ways. The first is business process reengineering, and the second is communication and connectivity. Information technology makes it possible to design complex products, improve market infrastructure, apply effective risk management strategies, and aid financial intermediaries in reaching geographically remote and diverse markets.

The banking industry makes extensive use of IT. Customers benefit significantly from IT-based applications including internet banking, mobile banking, telephone banking, ATMs, and POS networks when receiving current products. Every banking product has access to the most significant benefits with less expensive banking operations available for 24 to 7 days (Akhisar, Tunay & Tunay, 2015). As a result, there is less reliance on branches. Moreover, IT-based solutions offer chances to enjoy significant cost advantages, boosting profitability and facilitating lower risk than conventional banking goods. markets.

Organizational Performance

The ability of an organization to achieve its goals by employing its resources effectively and efficiently is referred to as organizational performance. (Daft, 2000) The ability of an organization to achieve its goals by employing its resources effectively and efficiently is referred to as organizational performance. ” (Richardo, 2001) is also a way to gauge how an organization’s condition has changed, or how decisions made by management and carried out by employees have affected the business (Robert et al., 2006). The accomplishments made by all departments are thought of as making up an organization’s performance. The organization’s objectives for a specific time period, outlining the accomplishments involved in each step (Lee & Huang, 2012). The concept of organizational performance is linked to an organization’s survival and success.

The dependent variable for this study that measures organizational performance was measured using the balanced scorecard methodology. On the survey items, it was measured from four perspectives: financial, customer, internal company operations, and learning and growth (Johnsen, 2001; Kaplan & Norton, 2001; Kotter, 2012). This all-encompassing method is said to be the most effective since it evaluates both short- and long-term goals, as well as financial and non-financial criteria in an organization.

Theoretical Framework

Open System Theory

Ludwig Von Bertanlanffy, a biologist, created open system theory in 1956, but it was immediately applicable to all fields of study. According to the open system idea, organizations are part of a wider environment that influences their performance and, in turn, is influenced by how they interact with it. The collection of factors that could potentially have an impact on an organization’s operations is known as the organizational environment (Davis & Powell, 2012). Organizations operate as open systems that depend on their environment for input and a market for their finished goods. They are ecological entities that have reciprocal relationships with other entities in their environment. In light of this, organizations depend on their surroundings for a variety of vital resources, including: The recurrent cycles of input, throughput, output, and feedback between an organization and its external environment are used in this approach to identify organizational behavior. Systems take in information or resources in the form of input from the environment. Throughput is the internal processing of the input that is then released into the environment as an output to maintain equilibrium. To ascertain whether the output was successful in reestablishing equilibrium, the system looks for feedback. As can be observed, the system approach is essential to this study because it emphasizes long-term objectives while also allowing Access Bank Plc to retain existence. The environment provides Access Bank Plc with the essential inputs, including workers, clients, security, etc. The society also depends on it for the security of its money.

Empirical Review

Researchers have shown a great deal of interest in the discussions regarding the impact of business environmental elements on organizational performance through time. For example,

Mwangi and Wekesa (2017) conducted research on the impact of economic factors on Kenya Airlines’ organizational performance. The research design used in this study is descriptive. The 245 employees in the finance department of Kenya Airways were the study’s target demographic. 74 respondents were picked at random using a stratified sample technique. A questionnaire was the main tool the researcher used to collect data. Secondary information was gathered from published sources and Kenya Airlines’ yearly reports. Analyses of the content and descriptions were used. Multiple regressions were also employed. The study found that economic issues, such as taxation and interest rates, had an impact on Kenya Airlines Limited’s organizational effectiveness.

 Udu (2015) undertook a study to establish the nexus between business operations (BO) and the economic environment in Nigeria from 1981 – 2013. Extant literature relating to inflation rate, interest rate, Unemployment rate, exchange rate as the independent variables and business operations as the dependent variable were reviewed. The ordinary least square method of analysis as well as appropriate statistical and econometrics tests of significance were used to analyze the longitudinal data 1981-2013 collected from the Central Bank of Nigeria (CBN) statistical bulletin2013 and world bank database. The results show that one percent rise in inflation rate reduces the output of  BO by NGN0.000463bn or NGN463,000,but as interest rates increase, the contribution of BO to the over conducted research between 1981 and 2013 to determine the relationship between business operations (BO) and the Nigerian economy. Existing research on the independent variables of exchange rate, unemployment rate, inflation rate, and interest rate as well as the dependent variable of business operations was reviewed. The Central Bank of Nigeria (CBN) statistical bulletin (2013) and world bank database were used to collect the longitudinal data 1981–2013, which were then analyzed using the ordinary least square method of analysis and appropriate statistical and econometric tests of significance. The findings indicate that a 1% increase in inflation reduces BO output by NGN0.000463bn, or NGN463,000, but that as interest rates rise, BO’s contribution to the nation’s overall output of goods and services improves, along with unemployment rates.

All out put of goods and services improves and so does unemployment rate. The implication is that the economy grows at a declining rate and does not encourage middle economic status. The study recommended that the government should have a rethink on its tacit financial support to business organizations if the current trend of uncompetitive economic environment must be reversed.

More so, Okechukwu and Okoronkwo (2018) conducted research to determine the relationship between business operations (BO) and the economic climate in Nigeria between 1981 and 2013. We reviewed the existing literature on business operations as the dependent variable and inflation rate, interest rate, unemployment rate, and exchange rate as the independent factors. The longitudinal data 1981–2013 obtained from the Central Bank of Nigeria (CBN) statistical bulletin2013 and world bank database were analyzed using the ordinary least square method of analysis along with the relevant statistical and econometric tests of significance. According to the findings, a 1% increase in inflation reduces BO production by NGN0.000463bn (or NGN463,000), but as interest rates climb, BO’s contribution to the overall output of goods and services and the unemployment rate both rise.

Using a non-parametic model of Data Envelopment Analysis (DEA) on data gather from 444 Ghanaian bank branches, Appiahene, Missah and Jaim (2019) examined the impact of IT on technology. The results suggested that IT had significant impact on the banks’ overall performance as a good number of them (78.82%) were efficient in their entire operations, even though their respective efficiencies in deposit and investment were not good.

Furthermore, Olarewaju and Elegunde (2012) studied how the external business environment affected the performance of organizations in Nigeria’s food and beverage sector. The study specifically looked into how the political and economic context affected organizational performance. Based on a sample of three companies with a sample size of 150, a questionnaire was created to gather information from the respondents. Multiple regression analysis was used to analyze the data that was collected. The study’s conclusions demonstrate that the external business environment’s effects on organizational performance are both economic and political (effectiveness, efficiency, increase in sales, achievement of corporate goals etc.). Thus, organizations should do routine environmental scanning to pay closer attention to their surroundings.

METHODOLOGY

This study examined how external environmental influences (economic and technology) on the performance of Access Bank Plc. This study utilized the survey method. The population targeted in this study is top and middle level managers of the Access Bank Plc who are currently serving in Lagos, Abuja and Enugu branches in regardless of years of experience as at August 2022. The population was determined through informal interviews with a few managers and important individuals who have access to the employment registers at their respective companies. Population figure is estimated at five hundred and eighty-two (582) (Personal communications, June 14, 2019). 226 sample sizes was obtained using Krejcie and Morgan sample size determination table from a population of five hundred and eighty-two (582).  Data from respondents was collected using a structured questionnaire. Construct and face validity were used to establish the validity of measurements. Meanwhile, a test-retest method was used to assess the reliability of the questionnaire. The analysis was based on 196 copies of returned questionnaires representing 87%. The Jacque Bera normality test, correlation, and OLS multiple regressions are among the statistical techniques that were employed to analyze the data.

DATA PRESENTATION, ANALYSIS AND DISCUSSIONS

Reliability Text

 Cronbach’s alpha’s criterion for determining the internal consistency reliability are as follows: Excellent (a>0.9), Good (0.7<a<0.9), Acceptable (0.6<a<0.7), Poor (0.5<a<0.6), Unacceptable (a<0.5).

Table 1: Cronbach’s Alpha

Source: Field Survey, STATA 13, 2022.

According to the aforementioned table, the Cronbach’s alpha values for organizational performance, technological variables, and economic factors are 0.797, 0.824 and 0.918 respectively. This demonstrates that the data are reliable and internally consistent. The data set are also reliable and acceptable for the analysis because the Cronbach’s Alpha values both overall and individuals are greater than the critical value which for this study is 0.5.

The research question was answered using tables, frequency, percentage, mean and standard deviation while the hypothesis was tested at 0.01 level of significant using Pearson Correlation with the aid of STATA 13.

Table 2: Research Question One: What is the effect of economic factors on the performance of Access Bank Plc?

Source: Field Survey, STATA 13, 2022.

From table 2 above, it is evident that 171 respondents representing 87.24% strongly agreed with the fact that credit policy is not threatened by interest rate fluctuations, 17 respondents representing 8.67% agreed, 5 respondents representing 2.55% were neutral, and 3 respondents representing 1.53% strongly disagreed with the fact that credit policy is not threatened by interest rate fluctuations. This implies that credit policy is not threatened by interest rate fluctuations.

In respect of statement 2 from table 2 above, 56 responses claiming 28.57% strongly agreed with the fact that deposit liabilities have not decline due to inflationary trend, 130 responses claiming 66.33% agreed, 3 responses claiming 1.53% were neutral, 4 respondents representing 2.04% disagreed and 3 responses claiming 1.53% strongly disagreed with the fact that deposit liabilities have not decline due to inflationary trend. This implies that deposit liabilities have not decline due to inflationary trend.

With respect to statement 3 from table 2 above, 47 respondents representing 23.98% strongly agreed with the fact that they have strategies to take advantage of business cycles, 121 respondents representing 61.73% agreed, 21 respondents representing 10.71% were neutral, 3 respondents representing 1.53% disagreed and 4 respondents representing 2.04% strongly disagreed with the fact that they have strategies to take advantage of business cycles. This implies that they have strategies to take advantage of business cycles.

Table 2 above equally shows that 98 respondents representing 50.00% strongly agreed with the fact that staff remuneration is competitive, 74 respondents representing 37.76% agreed, 3 respondents representing 1.53% were neutral, 4 respondents representing 2.04% disagreed and 17 respondents representing 8.67% strongly disagreed with the fact that staff remuneration is competitive. This implies that Staff remuneration is competitive. 

Table 3:Research Question Two: How does technological factors affect the performance of Access Bank Plc?

Source: Field Survey, STATA 13, 2022.

From Table 3 above, it is evident that 82 respondents representing 41.84% wholeheartedly concur that using IT tools to support collaborative work is a good idea (e.g. calendars, video conferencing systems, communication tools),46 respondents representing 23.47% agreed, 10 respondents representing 5.10% were neutral, 9 respondents representing 4.59% disagreed and 49 respondents representing 25% strongly disagreed with the fact IT tools are used to support collaborative work (e.g. calendars, video conferencing systems, communication tools). This means that collaborative work is supported by the usage of IT tools (e.g., calendars, video conferencing systems, communication tools).

In respect of statement 2, 66 respondents representing 33.67% strongly agreed with the fact that IT based applications allow fast delivery of financial products, 121 responsesclaiming 61.73% agreed, 3 respondents representing 1.53% were neutral, 2 respondents representing 1.02% disagreed and 4 respondents claiming 2.04% strongly disagreed with the fact that IT based applications allow fast delivery of financial products. This implies that IT based applications allow fast delivery of financial products.

statement 3 from table 3 above indicated that 145 respondents claiming 73.98% strongly agreed with the fact that IT tools facilitate processing of network transactions, 40 respondents representing 20.41% agreed, 5 respondents representing 2.55% were neutral, 2 respondents representing 1.02% disagreed and 4 respondents representing 2.04% strongly disagreed with the fact that IT tools facilitate processing of network transactions. This implies that IT tools facilitate processing of network transactions.

With respect to statement 4 from table 3 above, 41 respondents representing 20.92% strongly agreed with the fact that IT tools are used to store data on implemented projects, tasks and activities, 117 respondents representing 59.69% agreed, 10 respondents representing 5.10% were neutral, 14 respondents representing 7.14% disagreed and 14 respondents representing 7.14% strongly disagreed with the fact that IT tools are used to store data on implemented projects, tasks and activities. This implies that IT tools are used to store data on implemented projects, tasks and activities.

Table 4: Descriptive Statistics on Organizational Performance

Source: Primary Data, STATA 13, 2022.

Table 4 above reveals that organizational performance has a grand mean score of 3.75 and standard deviation of 1.182.Majority of the respondents agree with the fact that their bank customer retention rate has improved which has a mean score of 4.01. Majority of the respondents agree with the fact that their bank delivers on its value proposition to customers which has a mean score of 3.73. Majority of the respondents agree with the fact that their bank internal processes are stream lined which has a mean score of 4.34. Majority of the respondents agree with the fact that their bank innovation is part of service delivery process which has a mean score of 3.68. Majority of the respondents agree with the fact that their bank organization climate supports its strategy which has a mean score of 3.74. Majority of the respondents agree with the fact that their bank invests in management development programs which has a mean score of 3.59. Majority of the respondents agree with the fact that their bank shareholders value has improved which has a mean score of 4.09. The majority of respondents, with a mean score of 4.85 agree that their bank produces acceptable returns on its assets.

Correlation Matrix

The correlation between the study variables was established using the Pearson correlation coefficient technique. The tables below provide a summary of the findings.

Table 5: Correlation Matrix

                    |     ORGP     TEFT     ECFT

————-+—————————

        ORGP |   1.0000

        TEFT |   0.3962   1.0000

        ECFT |   0.1287   0.4945   1.0000

Source: Field Survey, STATA 13, 2022.

The findings in table 5 above demonstrate the connections between Access Bank Plc’s performance and environmental factor substitutes. It was revealed that ORGP has positive and significant relationship with technological factors(TEFT) with correlation coefficient of r = 0.3962 and it was also revealed that ORGP has positive and significant relationship with economic factors(ECFT) with correlation coefficient of r = 0.1287.

Regression Analysis

To ascertain the impact of environmental factors on the performance of Access Bank Plc in Nigeria, a multiple regression analysis was carried out. To establish the statistical significance of the respective hypotheses, OLS analysis was conducted at 95% confidence level and 5% level of significance. The tables below show what the output outcomes are.

Table 6: OLS Regression Analysis

      Source |       SS       df       MS                         Number of obs =  196

————-+——————————             F(  2,   193) =   18.78

       Model |  427.493521     2  213.746761        Prob > F      =  0.0000

    Residual |  2196.17995   193  11.3791707      R-squared     =  0.1629

————-+——————————             Adj R-squared =  0.1543

       Total |  2623.67347   195  13.4547357        Root MSE      =  3.3733

——————————————————————————

        ORGP |      Coef.   Std. Err.      t    P>|t|     [95% Conf. Interval]

————-+—————————————————————-

        TEFT |   .7382069   .1270658     5.81   0.000     .4875909    .9888228

        ECFT |  .5826049   .1054393    5.53   0.000.4891827    .1239729

       _cons |    21.7176   2.423451     8.96   0.000     16.93775    26.49745

——————————————————————————

Source: Field Survey, STATA 13, 2022.

Table 6 above shows that the R Square value of 0.1629 indicating that 16% of the variation in performance of Access bank Plc can be attributed to environmental factors. While the remaining 84% can be attributed to other factor(s) outside environmental factors considered in this study. The adjusted R-square displayed a value of 0.1543 or 15% implying that the model can still accommodate additional independent variable without the R-square falling below 0.15.

The table also shows that technological factor (TEFT) has a positive and significant effect on performance of Access Bank Plc in Nigeria at 5% level of significant with t-value = 5.81 and p-value of 0.000 or 0% which is less than the 5% level of significant. Therefore, a unit increase in technological factor (TEFT) will lead to 0.738increase in performance of Access Bank Plc in Nigeria and a unit decrease in technological factor (TEFT) will lead to 0.738 decrease in the performance of Access Bank Plc in Nigeria.

Table 6 above reveals that economic factor (ECFT) has a positive and significant effect on performance of Access Bank Plc in Nigeria at 5% level of significant with t-value = 5.53 and p-value of 0.000 or 0% which is less than the 5% level of significant. Therefore, a unit increase in economic factor (ECFT) will lead to 0.583increase in performance of Access Bank Plc in Nigeria and a unit decrease in economic factor (ECFT) will lead to 0.583 decrease in the performance of Access Bank Plc in Nigeria.

Test for Multicollinearity using the VIF Test

VIF is an abbreviation for variance inflation factor. The estimates for a regression model cannot be computed in a unique way when the predictors are perfectly linearly related. Two variables are implied to be almost perfect linear combinations of one another by the word collinearity. Although the phrases are frequently used interchangeably, multicollinearity is the term used when there are more than two variables involved.

The main issue is that when multicollinearity rises, estimates of the coefficients in the regression model become unstable, and standard errors for the coefficients might become greatly overstated.

A general rule is that a variable may warrant additional examination or be unacceptable if its VIF values are greater than 10. Several researchers employ tolerance, defined as 1/VIF, to assess the level of collinearity. A tolerance value of 0.1 or less is equivalent to a VIF of 10. The variable could be thought of as a linear combination of other independent variables, according to this.

Table 7:Variance Inflation Factor (VIF) Test

    Variable |       VIF       1/VIF

————-+———————-

        ECFT |      1.32    0.755494

        TEFT |      1.32    0.755494

————-+———————-

    Mean VIF |      1.32

Table 7 above revealed that all the independent variables VIF value are less than 10 and the tolerance values are greater than 0.1, this is an indication that the independent variables are free from multicollinearity.

Test of Hypotheses

Hypothesis was tested at 0.01 level of significant using Spearman Ranking Correlation with the aid of Statistical Packages for Social Sciences (SPSS).

Test of Hypothesis One

H0₁: Economic factors have no significant effect on the performance of Access Bank Plc

H1₁: Economic factors have significant effect on the performance of Access Bank Plc

Based on the above facts and figures that has been established in the correlation matrix in table 5and regression coefficient in table 6 above, the findings reveal that economic factor (ECFT) has positive and significant relationship with the performance of Access Bank Plc and that economic factors have significant effect on the performance of Access Bank Plc. Therefore, the null hypothesis which states that “economic factors have no significant effect on the performance of Access Bank Plc” is rejected and the alternative hypothesis which stated that “economic factors have significant effect on the performance of Access Bank Plc.” is accepted.

Test of Hypothesis Two

H0₂: Technological factors have no significant effect on the performance of Access Bank Plc.

H1₂: Technological factors have significant effect on the performance of Access Bank Plc.

Based on the above facts and figures that has been established in the correlation matrix in table 5 and regression coefficient in table 6 above, the findings reveal that technological factor (TEFT) has positive and significant relationship with the performance of Access Bank Plc and that technological factors have significant effect on the performance of Access Bank Plc. Therefore, the null hypothesis which states that “technological factors have no significant effect on the performance of Access Bank Plc” is rejected and the alternative hypothesis which stated that “technological factors have significant effect on the performance of Access Bank Plc” is accepted.

DISCUSSION OF FINDINGS

From the analysis, economic factors (ECFT) have positive and significant effect on performance of Access Bank Plc at 5% level of significant with t-value = 6.05 and p-value of 0.000 or 0% which is less than the 5% level of significant. Therefore, a unit increase in economic factor (ECFT) will lead to 0.485 increase in performance of Access Bank Plc and a unit decrease in economic factor (ECFT) will lead to 0.485 decrease in the performance of Access Bank Plc. This finding is supported by the findings of Mwangi and Wekesa (2017), Udu (2015) and Olarewaju and Elegunde (2012) among others who revealed that economic factor has significant effect on performance. The system theory equally renders credence to this finding because organizations (including Access Bank Plc) do not operate in a vacuum but amidst varying economic factors.

Furthermore, analyses also revealed that technological factors (TEFT) have positive and significant effect on performance of Access Bank Plc at 5% level of significant with t-value = 8.72 and p-value of 0.000 or 0% which is less than the 5% level of significant. This implies that a unit increase in technological factor (TEFT) will lead to 0.574 increase in performance of Access Bank Plc in Nigeria and a unit decrease in technological factor (TEFT) will lead to 0.574 decrease in the performance of Access Bank Plc in Nigeria. Therefore, technological factors have significant effect on organizational performance of banks in Nigeria. This finding is in agreement with the findings of Ismail, Hani and Mohammad (2020), Appiahene, Missah and Jaim (2019), Okechukwu and Okoronkwo (2018) among others who revealed that technological factor has significant effect on performance. The open system theory also concur to this finding since no organization (including Access Bank Plc) can survive in today’s competitive business world without adapting to new technologies.

CONCLUSION

This study empirically examines the influence of external environmental factors onorganizational performance with particular reference to Access Bank Plc. The result of this study reveals in its totality that economic and technological factors have significant relationship with the performance of Access Bank Plc. To this end therefore, very clear evidence has been established through this study that environmental factors is a significant predictor of the performance of Access Bank Plc specifically, and banks generally in Nigeria. The study also concludes that not all external environmental manifestations negatively impact organizational activities. On the contrary, others have positive implications.

RECOMMENDATION

1. There is need for government and various policy makers to put in place policies that
   will improve the economic condition surrounding the banking industry as the study established that economic factors have an influence on organizational performance of Access Bank Plc. This will further strengthen customers’ trust and build confidence in the financial sector in the country.
2. Prompt knowledge of new technologies should be adapted by the bank as it will go a long way in enhancing the quality of their products and services. Whenever, there are changes in technology, managers should always ensure that their customers are considered first. This will make the bank to perform effectively.

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