SOCIAL CULTURAL VARIABLES AND PRACTICES OF NIGERIAN FINANCIAL INSTITUTIONS
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SOCIAL CULTURAL VARIABLES AND PRACTICES OF NIGERIAN FINANCIAL INSTITUTIONS
INTRODUCTION TO CHAPTER ONE OF SOCIAL CULTURAL VARIABLES AND PRACTISES OF NIGERIAN FINANCIAL INSTITUTIONS
1.1 BACKGROUND OF THE STUDY
The environment in which financial transactions are conducted in the twenty-first century is an entangled combination of complicated socio-cultural, economic, political, and technological aspects that create intricate issues for financial institutions worldwide (Tesfayohannes, 2012).
This increasing complexity has created challenges for Nigerian financial institutions, as a KPMG (2012) study titled ‘Confronting Complexity’ identified common factors in Nigerian financial institutions, including increased business costs, a greater number of risks, difficulty making financial decisions, and delays in deals and transactions.
George (2011) succinctly captured the importance of socio-cultural realities on financial institution practises, revealing that significant socio-cultural differences exist between Nigeria and the United Kingdom,
making it difficult to transfer financial institution practises from one area to another given the trend of globalisation, multi-nationalization, and internationalisation of financial transactions.
Socio-cultural realities continue to impact transactions, technology, and performance in Nigerian financial institutions (Odekunle, 1989; Olaoye, 2003; Aghalino, 1998; Odetola & Ademola 1986).
However, significant developments in the global banking sector, such as technology, transportation, trade, commerce, and communication, are currently disrupting financial institutions in Africa, which are essentially sedentary (Ekeledo & Bewayo, 2009).
Similarly, Aldrich and Zimmer (1986) emphasise the importance of socio-cultural realities in financial institutions’ transactions, which they argue is rooted in social perspective. The former deals with the institutions,
norms, roles, and values that exist outside of particular financial institutions, while the latter covers the subjective portion of culture as indicated by individuals’ perceptions of the cultural system’s components.
The cultural system is analogous to an iceberg. The exterior or conscious aspect, as well as the internal or subconscious portion: the former includes the visible aspect that can be seen, such as behaviour and some beliefs, while the latter includes the part that cannot be seen, such as values and norms (Hall, 1976).
Similarly, Hofstede (2001) observed that human behaviour, particularly that of financial institution managers and employees, on which this study focuses, is influenced by socio-cultural practise, and that some behaviours cannot be detached from their socio-cultural environment (Bloodgood et al., 1995).
According to research and previous studies (Longenecker et al., 1989; Vitell et al., 2000), most financial institutions are immersed in unique circumstances and are vulnerable to social and ethical difficulties.
Wetherly (2011) defined socio-cultural variables as “anything not contained within the economy or political system.” According to him, a socio-cultural setting is a collection of activities and interactions that people participate in their personal and official obligations, such as demographic characteristics, age, ethnicity, religion, values, attitude, lifestyles, and associations.
These environmentally relevant patterns of conduct result in the formation of various cultural values in various civilizations, some of which impact financial institution decisions.
As a result, culture, as opposed to political, social, technological, or economic circumstances, has implications for economic behaviour and organisational performance (Shane, 1993; Shapero & Sokol, 1982).
1.2 STATEMENT OF THE PROBLEM
Previous research has found that organisational performance and growth in terms of profitability are not uniform over the world, since certain geographical areas are more prone to company growth than others. This is the main reason why some financial institutions have a better chance of growing than others.
The most frequently mentioned cause for higher organisational growth in certain regions or among specific ethnic groups is the good fortune of obtaining early colonial education (Olomi, 2009).
Education has gone a long way towards changing individuals’ sociocultural beliefs, resulting in changes in their attitude towards financial services. To achieve optimal performance, financial institutions must streamline their practises to adapt to various socio-cultural aspects.
The researcher, on the other hand, is looking into the relationship between socio-cultural characteristics and the practises of Nigerian financial institutions.
1.3 OBJECTIVES OF THE STUDY
The following are the study’s objectives:
1. To investigate the association between socio-cultural characteristics and Nigerian financial institution practises.
2. To discover socio-cultural characteristics that can influence Nigerian financial institutions’ practises.
3. To investigate additional elements impacting Nigerian financial organisations’ practises.
1.4 RESEARCH QUESTIONS
1. What is the relationship between socio-cultural characteristics and Nigerian financial institution practises?
2. What are the socio-cultural factors that can influence Nigerian financial institutions’ practises?
3. What are the other elements impacting Nigerian financial institutions’ practises?
1.5 HYPOTHESIS
HO: There is no substantial association between socio-cultural characteristics and Nigerian financial institution practises.
HA: There is a considerable association between socio-cultural characteristics and Nigerian financial institution practises.
1.6 SIGNIFICANCE OF THE STUDY
The following are the study’s implications:
1. The findings of this study will serve as a beneficial reference for financial institution management and the general public in Nigeria regarding the impact of various socio-cultural variables on the practises of financial institutions in Nigeria.
2. This research will also serve as a resource base for other academics and researchers interested in conducting additional research in this sector in the future, and if implemented, will go so far as to provide new explanations for the topic.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
These studies will look at the practises of financial institutions in Nigeria with the goal of determining the effects of socio-cultural variables on financial institution services.
Study limitations
1. Financial constraint- Inadequate funds tend to hamper the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data collection procedure (internet, questionnaire, and interview).
2. Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.
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