INFLUENCE OF STRATEGIC MANAGEMENT CAPABILITIES ON THE PERFORMANCE OF COMMERCIAL BANKS IN KENYA: CASE OF NAIROBI CENTRAL BUSINESS DISTRICT
Abstract
This study determined the influence of strategic management capabilities on the performance of commercial banks in the Nairobi County. The study deployed descriptive research design. The study was anchored on three theories; Resource Based View Theory, Competitive Advantage Theory and Dynamic Capabilities Theory. From a total population of 42 commercial banks with 902 line managers in the head offices that is middle and senior level, a sample of 270 respondents was used. The data was analyzed using SPSS software. Descriptive statistics such as tables, Pearson’s correlation and regression were used in analyzing the data. The study found out that managerial capabilities has a weak negative relationship with the performance of commercial banks. The findings indicated that the collaborative decision making process is very important in the bank performances as well as nurturing creativity and innovation among employees. It was also apparent that the various banks use different strategies in the evaluation of the level of achievement of the set targets. In addition, it was clear that, marketing research played a big role in banks performance as the banks were able to introduce products that met customer’s needs. The key aspects of banks financial capability was proper cash management which ensured continued business with minimal interruptions and timely payment of bills. The study found out that technological capability as a strategy to reach unbanked and to ease banking queues which in turn increased sales. Effective strategic management capabilities have direct influence on the performance of commercial banks. The study recommended that commercial banks should continuously engage in updating their systems to remain relevant in the market engage in creating visions and missions statements that spell their strategic focus in the future. The study also recommended that commercial banks should have market policy framework which sensitive to the action of rival banks and activities in the financial market plan on effective performance strategies to evaluate the achievement of performance targets. From the findings, the study concluded that appropriate application of strategic organizational capabilities and accurate response to market dynamics enhances the performance of commercial banks in Kenya.
Key Words: Management Capability, Marketing, Finance, Technology
CITATION: Nthoki, J., Omwenga, J., & Litunya, R. (2021). Influence of strategic management capabilities on the performance of commercial banks in Kenya: Case of Nairobi Central Business District. The Strategic Journal of Business & Change Management, 8 (3), 606 – 617.
Full Text:
PDFReferences
Allen, F., & Carletti, E. (2010). An Overview of the Crisis: Causes, Consequences, And Solutions.
Ansoff, I., & McDonnell, E. (1990). Mplanting Strategic Management. Upper Saddle River, NJ: Prentice-Hall. Armstrong, M. (2010). Human Resource Management Practice (12th Ed.). London: Kogan Page Limited.
Bryman, A. (2011). Social Research Methods, 4th Edition on Amazon.com. CBK. (2010). Monthly Economic Review. Nairobi, Kenya.
Central Bank of Kenya (2013). Bank Supervision Annual Report, Nairobi: CBK Central Bank. (2015). Financial Review. Nairobi, Kenya.
Central Bank of Kenya. (2017). Financial Report of Kenya.
Cooper, D. R., Schindler P. S. (2014). Business research methods (12th Ed) New from BUSI 600 at Liberty University.
Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press. Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy (8th Ed.). Prentice Hall.
Johnson, G., & Scholes, K. (2002). Exploring corporate strategy. (6th ed.), London: Prentice-Hall.
Julio, C. (2016). Sustainable competitive advantage. A survey of companies in Southern Brazil.
Ketchen, D., & Bergh, D. (2006). Research methodology in strategy and management. Amsterdam: Elseveir
Kibwi, A. (2015). Effect of talent management on employee retention in Kenya’s State corporations.
Kivuja, M.N (2011). Strategic management in SME’s at Kariobangi light industries. Unpublished MBA Project, Nairobi: University of Nairobi.
Kombo, D.K., & Tromp, D.L.A. (2006). Proposal and thesis writing: Nairobi: Paulines Publications Africa. Kothari, C.K. (2004). Research Methodology, Methods and Techniques: (2nd Ed)
Kotler, P., & Armstrong, G. (2010). Principles of Marketing (14th Ed). New York: Pearson. Kotler, P., & Armstrong, G. (2012). Principles of Marketing (14th Ed). Pearson Prentice Hall.
Kotler, P., & Armstrong, G. (2013). Principles of Marketing (14th Ed). London: Pearson Prentice Hall.
Kungu, G., Desta, I., & Ngui, T. (2014). An Assessment of the Effectiveness of Competitive Strategies by Commercial Banks: A Case of Equity Bank. International Journal of Education and Research, 2(12), 333–346.
Lwova, R. M. (2013). Strategic management practices of savings and credit coop societies In Mombasa County. European Journal of Management Sciences and Economics, 1(2), 116-127.
Mbondo, T. (2011). Strategic management practices at the Kenya police staff Sacco. Unpublished MBA project, Nairobi: University of Nairobi.
Mondy, R. W. (2009). Management: Concepts and Practices (8th Ed). New York: Allyn and Bacon. Mugenda, A. & Mugenda, M. (2013). Research methods, Quantitative and Qualitative approaches: Acts Press, Nairobi.
Mugenda, A, G. (2009). Social science research: Theories and Principles. Nairobi, Kenya: Applied Research & Training Sevices.
Mugo, B. (2016, November14). World Diabetes Day. Retrieved November 17, 2016, from MoH: Website: http://www.health.go.ke/?=1271
Muogbo, U. S. (2013). The Impact of Strategic Management on Organizational Growth And Development (A Study of Selected Manufacturing Firms in Anambra State). IOSR Journal of Business and Management, 7(1), 24-32.
Muruga, W.P. (2017). Influence of Microfinance lending on the performance of Small and Medium Enterprises in Gatanga Sub-County-Murang’a.
Ngigi & Njeru (2014). Institutional and organizational framework for milk marketing
Oswago, C. A. (2018). Influence of Strategic Management Capabilities on the Performance of Commercial Banks in Kenya.
Paladina, A. (2007). Investigating the drivers of innovation and new product Success: Comparison of strategic orientations. Journal of product innovation management
Pearce, J. A., & Robinson, R. B. (2011). Strategic Management: Strategy Formulation, Implementation and Control (12th Ed). Chicago, IL: R. D. Irwin, Inc.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 14(3), 179–191.
Peteraf, M. A., & Bergen, M. E. (2003). Scanning dynamic competitive landscapes: A market-based and resource-based framework. Strategic Management Journal, 24(10), 1027–1041.
Porter, M. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.
Porter, M. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78–93. Porter, M. E. (1985). Competitive advantage: creating and sustaining superior performance. New York: Free Press.
Porter, M. E., & Leo, J. (1982). Competitive strategy: Techniques for analysing industries and competitors Porter, Michael E. Free Press (Macmillan), New York, 396 pages, 17.95. Industrial Marketing Management, 11(4), 318–319.
Sekaran, U. & Bougie, R. (2009). Research Methods for Business A Skill- Building Approach. 5th Edition, John Wiley and Sons Inc., Hoboken.
Tatar, P., & Moradi, J. (2015). Investigation the Effect of Training Technology Equipment On Organizational Intelligence. Journal of Social Science and Technology Management, 3(2), 11–17.
Waiganjo, E. W. (2013). Relationship between strategic performance management and employee Retention in commercial banks in Kenya.
Wang, Zhang, Po Lo & Xue, (2006). How technological capability influences business Performance: An integrated framework based on the contingency approach. Nanjing University, Nanjing, China.
Watuka, J.M. (2014). Influence of strategic management practices on the growth of the Commercial banks in Kenya. Unpublished MBA project, University of Nairobi.
Welman, Kruger and Mitchell, (2008). Influence of Personal Epistemology on Research Design: Implications for Research Education.
Wilson M.A. (2003). Collaborative Decision Making: building consensus for project success.
DOI: http://dx.doi.org/10.61426/sjbcm.v8i3.2051
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.