Factors influencing the choice of operational strategies of deposit taking financial institutions in Kenya: a case of Postbank branches in Nairobi
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With the ever changing market dynamics firms have faced stiff competition prompting Them to adapt different styles of approach to different issues. Deposit taking institutions Have not been left behind and with those not ready for the change, seeing themselves stagnating with declining growth. The effects have been the transformation of the traditional banking practices to keep pace with the ever changing market conditions including service delivery occasioned by technological advancement, customer need and regulatory requirement among others. This study investigated factors that influence the choice of strategies adopted within the Deposit taking financial institutions with reference to Postbank branches within Nairobi. Special focus was on the extent the choices of strategies are affected by internal resources, management decisions contingency factors as external influencers. The methodology adopted was descriptive research design .Twenty eight branch heads And their assistants were interviewed. Data collected was analyzed varyingly using tables As the study's objectives. First a descriptive analysis based on the primary and secondary sources of data is undertaken in order to elucidate the institutional features. Second, factor analysis employing the principal component technique is used to identify the most significant factors that influencing the choice of operation strategies. The study revealed that operational strategies used by financial institutions in Kenya are affected by internal factors which are firms' resources, based factors, product, performance and structure, while in external factors; political legal, business environment, social, economic, and technological factors. It also shows that the other three factors are market oriented factors, top management attributes and board characteristics. The study recommended that this should not be seen as only affects Postbank but most of the organizations that is financial institutions as well as others Which are not of financial nature.