THE ROLE AND SIGNIFICANCE OF THE MODERN THEORETICAL FRAMEWORK OF CONCENTRATION FOR THE BANKING SECTOR IN THE STRATEGIC DECISION-MAKING PROCESS
THE ROLE AND SIGNIFICANCE OF THE MODERN THEORETICAL FRAMEWORK OF CONCENTRATION FOR THE BANKING SECTOR IN THE STRATEGIC DECISION-MAKING PROCESS

Summary/Abstract: In this paper, the authors present the modern theoretical aspects of concentration in the market with a focus on the banking sector and the impact on the process of making strategic decisions. In this context, recent empirical and theoretical researches, which are supported by findings from international scientific and professional literature, were analyzed. In addition to numerous strategic decisions, decisions on the selection of business partners and new organizational forms, as well as decisions related to the management of the new organization as a whole, have an increasingly significant impact on achieving a sustainable competitive advantage. In the paper, the authors additionally indicate the importance of analyzing the level of concentration in the financial market, especially in the banking sector. In this regard, it was stated that strategic decisions are made at the highest managerial levels, which aim to achieve and maintain competitive advantage, maximize profits and sustainable growth and development of the banking sector. Behind the concept of concentration in the banking sector, we find the explanation that it is a form of association of banks, by which they come under joint control, and a certain level of economic unity is created between them, which did not exist until the moment of association, because banks, legally and economically, acted as independent subjects. Partner banks participating in the merger/acquisition process must prove that the concentration will bring market benefits, that is, that there will be no unwanted market consequences in the sector.

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