Restructuring Strategies and Performance of Small and Medium Commercial Banks in Nairobi City County,Kenya

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dc.contributor.advisorJames M.Kilikaen_US
dc.contributor.advisorAnne W. Muchemien_US
dc.contributor.authorShurie, Fatuma Barlin Omar
dc.date.accessioned2023-02-01T09:07:24Z
dc.date.available2023-02-01T09:07:24Z
dc.date.issued2022
dc.descriptionA Thesis Submitted in Partial Fulfillment of the Requirements for the Award of the Degree of Doctor of Philosophy in Business Administration (Strategic Management), School of Business Kenyatta University,August,2022en_US
dc.description.abstractSmall and medium size commercials banks in Kenya have experienced performance challenges such as reduced market share, reduced pre-tax profit, declining gross loans and advances as well as increased ratio of gross non-performing loans to gross loans. The corporate competitive world characterized with cut-throat competition compels entities to identify and adopt appropriate strategies that ensure their survival which if properly designed and implemented result in improved performance. Despite the fact that small and medium size commercial banks have been advised to adopt viable restructuring strategies to address their performance challenges, extant research has not documented the extent of adoption of the strategies and their effect on performance. This study investigated the effect of restructuring strategies on performance of small and medium commercial banks in Nairobi City County, Kenya while integrating the mediating and moderating effects of competitive advantage and bank characteristics respectively. The study was guided by five objectives that sought to determine the direct effects of operations redesign, business portfolio and cost cutting restructuring strategies on performance as well as the mediating and moderating effects of competitive advantage and firm characteristics respectively on the effect of restructuring strategies on performance of small and medium size commercial banks in Nairobi City county Kenya. The study was anchored on the postulates of BCG Model, Greiner Model of Growth, Upper Echelon Theory, Resource Based View of the firm and the Balanced Scorecard Model. The research adopted a positivism research philosophy and a corresponding descriptive and explanatory research designs. The population of the study was 32 small and medium size commercial banks that were studied from their respective headquarters through the representatives of purposively selected functional areas. A census survey of the 32 banks was done and a sample of 128 representatives of 4 functional areas in each bank used to obtain primary data that was collected through a structured questionnaire on the five variables of the study. The data collection instrument received a response rate of 85% and its reliability score was 0.957. The study found that the sampled banks adopted and applied the restructuring strategies to a high extent (mean>4), the level of competitive advantage generated from the restructuring strategies was at a high level (Mean=4) while the respondents were of the opinion that the characteristics of the banks have contributed to the banks current state to a high extent. Operations redesign and business portfolio restructuring strategies have a significant positive effect on performance of the small and medium size commercial banks while cost cutting restructuring strategy has a negative non-significant effect on performance of the sampled banks. The level of competitive advantage obtained from the restructuring strategies has a partial mediating effect on the relationship between restructuring strategies and performance while the firm characteristics of the sampled banks has a significant moderating effect on the relationship between restructuring strategies and performance of the small and medium size commercial banks in Nairobi City County, Kenya. The findings raised implications on the manner restructuring strategies are operationalized and pointed to the need to streamline business operations, adopt new business models and leverage on existing synergies among strategic business units while implementing the restructuring strategies. The study concluded that the different types of restructuring strategies have both positive and negative effects on performance of small and medium size commercial banks and that this direct effect is both mediated and moderated by the level of competitive advantage obtained from the restructuring strategy and the bank firm characteristics respectively. The study called on the management of the small and medium size commercial banks to consider undertaking review of the banks' operations, adopt new business models for enhancing value proposition and consider diversifying the scope of their businesses to increase their size. Future research can consider replicating the current study in the entire banking industry in Kenya, expand the scope of the restructuring strategies and apply more robust statistical techniques.en_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/24598
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectRestructuring Strategies and Performanceen_US
dc.subjectSmall and Medium Commercial Banksen_US
dc.subjectNairobi City Countyen_US
dc.subjectKenyaen_US
dc.titleRestructuring Strategies and Performance of Small and Medium Commercial Banks in Nairobi City County,Kenyaen_US
dc.typeThesisen_US
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PHD-Department of Business Administration