The Impact of Strategic Agility in Reducing Credit Risks in Iraqi Commercial Banks

Abstract

This study aims to find the effect of strategic agility in reducing credit risks in Iraqi commercial banks. This study used a quantitative research design. It used two types of data : Primary data are used to measure strategic agility through a questionnaire that was distributed to 400 employees, including managers, assistants, and workers at the relevant administrative levels. The secondary data were adopted from the financial statements of the banks between the years 1995-2023 to measure credit risk. The results of this study revealed an impact of resource fluidity and collective commitment on credit risk. This indicates that banks can reduce credit risks if they adopt the correct strategy. At the same time the results of the study did not show any significant effect of strategic sensitivity on credit risk. The limitations include the use of commercial banks only. Future research can include non-financial companies and different sectors in other countries. The practical implications indicate that banks must be rational and justified when making decisions regarding choosing a strategy that suits rapid and sudden changes, to avoid credit risks. In addition, commercial banks should implement strategic agility to achieve comprehensive results. The originality of this study lies in giving insight into strategic agility and credit risk. Therefore, the results of this study have important implications for shareholders, investors, and managers.