Gary Rogers claims that the uncertainty surrounding Dundalk off the field is impacting their performances on the field.
Since 2014 the Louth club have won five SSE Airtricity League titles, two FAI Cups, as well as appearing in the the group stages of the Europa League twice.
But this season has been more difficult, with the Lillies currently languishing in seventh place in the Premier Division table. Sunday's defeat to Derry City has left them just two points clear of the relegation play-off, while the gap to Sligo Rovers in third in 11 points.
Furthermore, despite putting in a commendable performance over two legs against Eredivisie side Vitesse in the Europa Conference League, they were knocked out in the third round qualifiers.
With only the top three clubs in the league guaranteed European soccer next season, Vinny Perth's charges face an uphill task to make sure they're competing in lucrative continental qualifiers again next season - although retention of their FAI Cup could still provide a place in next summer's draws.
Speaking on RTÉ's Soccer Podcast, Rogers, who made over 100 appearances for the club, argued that both players and management need to be given certainty.
"When you look at the players in the dressing room, and you look at how they performed in Europe, the capacity to play good football is there," he said.
"I do think the uncertainty around the club has led to the league form demising over the last couple of seasons. We spoke earlier about Bohemians trying to get their business done, and signing up players.
"I don't know what the strategy is with Dundalk at the minute in terms of signing the players they want to keep at the club next year. Last year they let everyone's contract run out and then spoke to players. They lost players - some players went and some stayed on.
"Clubs are doing their business now and will be doing it until the end of the season in terms of cherry picking the best players. You look at the performance of Dundalk players over the European run - there are players there that other clubs are going to want - there's no doubt at that.
"To leave them with that uncertainty over their contracts until the end of the season; that's just not going to fly. You will lose your best players. Look at Shamrock Rovers picking up Sean Gannon and Sean Hoare.
"You'll have that situation again with the likes of Pat Hoban if contacts aren't put on the table.
"It's poor business; it doesn't make sense. Lads last year qualified for the group stages [of the Europa League]. What more indication do you need that players are good enough?"
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