Effects of Business Process Management Practices on Financial Performance of Commercial Banks in Nairobi County, Kenya.
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Date
2020
Authors
Kiruja, Kawira Caroline
Kimencu, Linda
Journal Title
Journal ISSN
Volume Title
Publisher
International Academic Journals
Abstract
Today’s competitive markets make
businesses more dependent on their ability
to react to changes and adjust their
processes to the new requirements. To raise
efficiency as is required by the bank’s
regulators has a number of limitations that
includes a regulated financial market, new
customer base and the projected revenue. In
this environment, it is a key test for business
organizations to transform the vast number
of concepts and ideas into products and
services. In order to achieve this, a number
of banks are thus looking at optimization of
internal processes and practices as the front
line in the battle for efficiency. In this
context Business Process Management is a
good support for organizations. The
purpose of this study was to establish the
effects of business process management
practices on financial performance of
commercial banks in Nairobi County. The
general objective was to establish the
effects of business process management
practices on financial performance of
commercial banks in Nairobi County. The
specific objectives were; to establish the
extent to which strategic alignment affects
financial performance of commercial banks
in Kenya, the effects of information
technology on financial performance of
Commercial banks in Kenya, the role of
process improvement on financial
performance of commercial banks in Kenya
and how employee involvement has
affected the financial performance of
commercial banks in Kenya. The study was
under pinned by the dynamic capability
theory, resource-based theory and the
contingency theory. The study employed a
descriptive research design. The target
population of this study was 60 employees
from 20 commercial banks spread across
Nairobi County at the Head Offices.
Stratified sampling technique was used to
select the sample size. Simple random
sampling was used to select the sample. The
study relied on both the primary and
secondary data sources where primary data
was collected using both structured and
unstructured questionnaires and Secondary
data was obtained from audited financial
statements over a period of five years for
adequate representation. Validity and
reliability were assessed through a pilot
study. Statistical Package for Social
Science (SPSS) version 22.0 was used to
present descriptive statistics such as
percentages, frequency distributions,
measures of central tendencies and
measures of variations. Data analysis and
interpretation was based on descriptive
statistics and measures of dispersion as well
as inferential statistics. Multiple linear
regression models were employed to
establish the influence among variables.
Pearson correlation was also used to
ascertain the potency of the linear
relationship between each of the
independent and dependent variables. The
study would be useful to banks,
academicians and the government in that it
will aid in formulation of better policies,
source of knowledge and will help
determine the extent to which BPM has
been adopted in the country. From the
study therefore it was recommended Policy
makers should highly invest on structures,
strategies and that determine changes in
markets vis a vis its strengths and abilities
to harness its full potential. They should
adopt an integrated approach and business
processes that transform the entire
organization paving way for continuous
renewal and lasting adding value. There is
also need to develop greater awareness on
the business process management practices that affect the financial performance of
commercial banks. From the multivariate
regression applied to determine the
importance of every variable on the
financial performance of commercial banks
in Kenya. The study recommended that
further research be carried out to establish
what other variables significantly affect the
financial performance of banks and the
study be extended to non-financial
performance.
Description
A research article published in International Academic Journal of Human Resource and Business Administration
Keywords
business process management practices, financial performance, commercial banks, Nairobi County, Kenya
Citation
Kiruja, K. C. & Kimencu, L. (2020). Effects of business process management practices on financial performance of commercial banks in Nairobi County, Kenya. International Academic Journal of Human Resource and Business Administration, 3(9), 1-26