Strategic Management Drivers and Performance of Tier Three Commercial Banks in Kenya
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Date
2020
Authors
Muiga, Grace
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
In the current 21st century where organizations are surrounded by all kinds of
dynamics most of which threaten their existence and growth, strategic management
remains the only way out. For an organization to adopt any new strategy, there are
those drivers that ought to grease the strategy and make it effective. Strategic
management drivers have been known to enhance the performance of organizations
across the globe. Strategic management drivers are the key enablers of modern
organizations to strategically place themselves in the market through which they
gain competitiveness and improved performance. Performance of the tier three
banks in Kenya has been declining as evidenced by overwhelming closure of
branches, employee turnover and decreasing profit margins. Recently, some tier
three commercial banks have been held under receivership while others being on the
warning note by the Central Bank of Kenya due to continued underperformance.
The main aim of this study was TO establish the influence of strategic management
drivers on performance of tier three commercial banks in Kenya. Specifically, the
study sought to assess the influence of information technology, customer
relationship management, human capital, organizational culture, and organizational
planning on the performance of tier three commercial banks in Kenya. The study
was informed by five theories which included technology acceptance theory,
commitment trust theory, resource-based theory, Durkheim’s theory of culture and
systems theory. Descriptive research design was employed while the target
population was the 22 tier three commercial banks in Kenya. Due to the minimal
number of target population, a census was employed whereby all the 22 tier three
commercial banks were included in the study. Purposive sampling was adopted to
sample 4 managers from each of the tier three commercial banks which made a total
of 88 respondents. Data was collected using structured questionnaire and analysed
using mixed analysis method whereby qualitative data was analysed through content
analysis and quantitative data analysed through descriptive and inferential statistics.
The analysed data was presented in frequency tables, bar-graphs and pie-charts for
easier interpretation. The findings revealed that information technology was a key
strategic driver that had a significant (P-value=0.000<0.05) and positive (β=0.771)
influence on the performance of tier three commercial banks in Kenya. Moreover,
the findings revealed that human capital, planning, organizational culture and
customer relationship management had a significant and positive influence on the
performance of tier three commercial banks in Kenya. The study concluded that
through information technology, customer relationship management, human capital,
planning and organizational culture, performance of tier three commercial banks in
Kenya was enhanced. The study recommends that the commercial banks through
their management should embrace information technology, customer relationship
management and human capital so as to promote effectiveness and efficiency in
their operations. The banks should ensure that their organizational culture are built
on organizational values and employees’ personal believes and that effective
planning is done to promote their efficiency and performance.
Description
A Research Project Submitted to the School of Business
in Partial Fulfilment of the Requirements for the
Award of the Degree of Master of Business
Administration (Strategic Management), Kenyatta
University
Keywords
Strategic Management, Tier Three Commercial Banks, Kenya, customer relationship management, human capital, organizational culture, organizational planning