Relationship Between The Using Of Strategic Planning Tools And Profitability Trends In Islamic Banks

Abstract

Purpose: This paper is mainly to assess the relationship between using strategic planning tools and profitability trends in the Islamic banking sector in Palestine. In addition, the study examines the significance of using each of the following: SWOT analysis, customer satisfaction analysis, customer complaints analysis and VRIO framework analysis as strategic planning tools and their relationship to profitability trends in the Islamic banking sector in Palestine. Methodology: The paper used a quantitative approach to reach its results. It utilizes a questionnaire for data gathering and observation of the annual financial reports to analyze the relationship between profitability trends and the chosen strategic planning tools. However, the data was analyzed using the SPSS program for statistical analysis to determine what is relationship between the study’s variables by using different descriptive tests to find frequencies and means. In addition, cross- tabulation tests and Chi- square tests are used as main tests to examine the study’s hypothesis that investigate the relationship between the variables and the independency of the study’s variables. Findings: The paper found that there is a relationship between applying strategic planning tools such as SWOT analysis, customer complaint analysis, and customer satisfaction analysis. tthis relationship is assumed to be logically classified as a positive one, which means that applying these tools will help to increase profitability. Moreover, the study findings show that there is a relationship between applying SWOT analysis, customer satisfaction analysis, and customer complaints analysis as a strategic planning tools and profitability in the Islamic bank. On the other hand, there is no relationship between applying VRIO framework analysis considering it a strategic planning tool, and profitability in the Islamic. Recommendations: The researchers recommends the Islamic bank CEO’s in Palestine to focus more on developing and improving the strategic planning tools and techniques in their institutions. Finally the Palestinian monetary authority is recommended to encourage financial institutions in Palestine to pay more attention to strategic planning tools and techniques.