Business_practices_strategy_competition_performance_of_microfinance_Chapter2_Part5.docx - ii Relationships between Business Practices and Performance of

Business_practices_strategy_competition_performance_of_microfinance_Chapter2_Part5.docx

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ii. Relationships between Business Practices and Performance of MFIs Findings of prior studies suggest that effective business practices are related to organizational performance. Previous empirical studies have provided the evidence that indicate the linkage between business practices and organizational performance (Daud &Mohamad, 2010; Hashim, 2011; Hassan, 2010; June & Mahmood, 2011; Subramaniam, Mohd Shamsudin, & Ibrahim, 2011). However, there is not much information on the relationship between the business practices and the performance of MFIs, especially in the Nigerian context. More specifically, the studies by Abraham and Balogun (2012) and Olanike and Adebola (2014) have suggested that more studies are needed to investigate the linkage between business practices and performance of MFIs in Nigeria. Previous studies that examined the direct relationship between business practices and organizational performance of MFIs presented inconsistent findings (Abdul & Makki, 2014; Mersland & Strøm, 2009; Tchakoute-Tchuigoua, 2010; Thrikawala et al., 2013).The inconsistent findings suggest that the relationship between business practices and performance of MFIs may be influenced by a moderating variable, in particular, business strategy (Baron & Kenny, 1986; Jose, 2015). In addition, the studies by Djalil (2015), Kamukama et al.,(2011),Yuliansyah et al., (2017) and Linton and Kask(2017)have found that business strategy has interaction effect on the relationships between business practices and performance of MFIs. Based on the contingency framework, previous studies viewed competition as one of the important contingency factor that can affect the performance of organizations. However,
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