Strategic Management Practices on The Perfomance of Commercial Banks in Thika Town, Kenya
Mwangi, Phyllis Wanjiru
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The significance of strategic management in any company can be attained by having an extensive analysis of strategic management practices and the organization’s performance. Using strategic management will cause a better effectiveness within companies. Additionally, the strategy will assist companies in obtaining competitive advantages in the market, thereby, outperforming their competitors. This study analyzed the effect that strategic management practices have on the performance of commercial banks in Thika town, Kenya. The research assessed the outcomes of formulating strategies on the performance of commercial banks in Thika, with the aim of determining effects of strategy implementation on performance of commercial banks in Thika town and the effect of strategy evaluation and control on the performance of commercial banks in Thika town. Organizational performance was assessed using non-financial and financial indicators. The research employed a census study method to select all the 14 active commercial banks in Thika town. This research chose Managers in-charge of Finance, Administration, Institutional Banking, Retail Banking and overall branch managers from each of the 14 commercial banks in Thika town, as the class of respondents from each bank which led to a total of 70 respondents, applicable data was gathered from 60 respondents from the commercial banks (representing86%) response rate. Equally primary and secondary statistics were applied. Questionnaires were utilized in gathering primary data. The research tested reliability by Cronbach’s Alpha Reliability test while content validity was evaluated using expert outlook. Secondary data was gathered from the yearly financial reports, website, journals, and other bank reports. The research used both descriptive and inferential statistics in analyzing the study and correlation and regression examination as significant logical models. A descriptive research design was used for this study and data was gathered using a questionnaire for collection of quantitative data. The data collected was input in excel and cleaned. Tables and charts were developed using MS excel. Data was then exported to SPSS Version.21 for analysis. The findings of the study has shown that a unit increase in strategy formulation led to a (0.528) increase in performance of commercial banks in Thika town; a unit increase in strategy implementation led to a (0.641) increase in Performance of commercial banks in Thika town; a unit increase in strategy evaluation and control led to a (0.693) in performance of commercial banks in Thika town, this implies that the most significant variable was strategy evaluation and control, followed by strategy implementation and finally strategy formulation in that order. Strategy evaluation and control stood out to be the most because it had a significant p value of (0.0412). In terms of magnitude, the findings indicated that all the variables were important as their P-values were less than (0.05). The study recommended further on look of strategic management practices as demonstrated to enhance performance and build a competitive advantage of the commercial banks in Thika town. Investors, top management teams, government, scholars, and academicians will greatly benefit from this study since it will offer great insights that will guide them in future.