MODERATING ROLE OF STAKEHOLDER ENGAGEMENT ON THE EFFECT OF STRATEGIC ALIGNMENT AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS (DMB’S) IN NIGERIA

Abstract

This study examines the relationship between strategic alignment, stakeholder engagement, and
financial performance within Deposit Money Banks (DMBs) in Nigeria. Using a quantitative
research approach, data was collected from top managers of DMBs through a structured survey
instrument. The analysis employed Partial Least Squares Structural Equation Modeling (PLS-SEM)
to assess the direct and moderated effects of strategic alignment and stakeholder engagement on
financial performance. The findings reveal significant positive relationships between strategic
alignment, stakeholder engagement, and financial performance. Moreover, stakeholder engagement
was found to moderate the relationship between strategic alignment and financial performance
positively. These results contribute to both theoretical understanding and practical implications for
DMBs seeking to enhance their competitiveness and long-term sustainability in Nigeria's banking
sector. The study recommendations that DMBs should invest in building robust stakeholder
engagement frameworks that promote transparency, trust, and dialogue. This entails developing
tailored communication strategies, establishing feedback mechanisms, and integrating stakeholder
perspectives into strategic planning and execution. Furthermore, managers should recognize the
strategic value of stakeholder engagement and empower employees at all levels to actively
participate in relationship-building initiatives. Further, the study suggests for future studies to
explore the enduring effects of strategic initiatives and stakeholder engagement on financial
performance, as well as investigating contextual factors such as organizational culture and
technological innovations in shaping these relationships.