An assessment of factors affecting choice of growth strategy by selected commercial banks in Kenya

Abstract

The selection of a suitable strategic option is not an easy decision. It involves a lot of complex consideration. Several factors affect the choice of strategic option. They include both tangible and intangible elements. A company's strategy can be considered on any number of dimension including whether it emphasize product differentiation or low cost, innovation or reliability, innovation timing or focus, domestic or international activity and so on.

The process of strategy choice is as much political as legal process. Firm strategy need to be conceptualized according to the extent it adheres or deviate from the central tendency of the industry. The banking industry in Kenya is highly competitive market with over 50 players. The competition has made the players in the sector to come up with competitive measures to remain relevant in the industry. Competitive strategy choice is top most innovation in the industry.

The aim of this study was to assess factors affecting choice of growth strategy by selected commercial banks in Kenya. The general objective of the study was to investigate factors affecting choice of growth strategy by selected commercial banks in Kenya. The population under study comprised of 1919 staff from credit, operations, information technology, research, innovation and strategy and human resources divisions of five major commercial banks in Kenya.

A sample of 191 staffs was drawn using stratified sampling. Each respondent filled and submit a structured questionnaire that was administered personally. The researcher used statistical data analysis programme (SPSS) to carry out data analysis to describe the relationship between the dependent variable (strategy choice) and the independent variable, information technology, organizational resources, organizational culture, industry competition and top management preferences. Finding was presented by way of charts, graphs and tables. The researcher took 21 weeks to complete the work.