INFLUENCE OF EXTERNAL ENVIRONMENT ON STRATEGIES ADOPTED BY DEPOSIT TAKING SACCOS IN KENYA: A SURVEY OF DEPOSIT TAKING SACCOs IN NAIROBI COUNTY
Abstract
The operations of any organization are affected by influences emanating from both internal and external environment. Most of those from internal environment are effectively addressed by the management. However, the external environment in which organizations operate is characterized by constant changes resulting from remote factors that are beyond the organizations capability to respond. A host of external factors influence a firm’s choice of direction and action and ultimately its organizational structure and processes. Coping with the increasingly competitive and dynamic environments therefore calls for SACCOs to continuously rethink on their strategies.
The main objective of this study was to assess the influence of external environment on strategies adopted by deposit taking SACCOs and the population of interest comprised of all the 35 deposit taking SACCOs in Nairobi County. This study adopted a descriptive research design and collected primary data using structured questionnaires. Descriptive statistics was used to analyze data by way of percentage or proportion, mean and frequency distribution. The data analysis tools of Statistical Package for Social Sciences (SPSS) version 21 were used, to give a deeper insight into the responses from the respondents into the subject of the research.
The findings of the study revealed that the deposit taking SACCOs in Nairobi County face many challenges due to constantly changing external environment and therefore they have to set out strategies in order to adapt to the challenges. These environmental factors include political/legal factors and technology related factors. Based on the findings of the study, the researcher recommended that the management of the SACCOs should also concentrate on product development strategies such as product refinement, developing new products for the existing, expanding the product lines in response to the environmental challenges facing the SACCOs. These will assist the SACCOs maximize revenue from the existing market and therefore remain competitive. This is because SACCOs target a particular group of people who have common interests and such SACCOs as Staff SACCOs have a limited number of members especially the ones serving members of staff in small organizations. Diversification strategies also need to be considered in order to increase their market share.
Key Words: External Environment, Strategies, Deposit Taking
Full Text:
PDFReferences
Ansoff, H.I. & McDonnell, E.J. (2010). Implanting strategic management (2nd ed.). Prentice Hall.
Chatterje, S., Wernerfelt, B. (2011). The link between resources and type of diversification: Theory and evidence. Strategic Management Journal, 12, 33-48.
Clarke R (2005). Industrial Economics, London, Basil Blackwell Ltd.
Chandler AD, Jr (2007). The Visible Hand: The Managerial Revolution in American Business, Cambridge, Massachusetts, Harvard University Press.
Eisenhardt, K.M. and Martin, J.A. (2010). “Dynamic capabilities: what are they”, Strategic Management Journal, Vol. 21 Nos 0/11, pp. 1105-1121.
Everett M. Rogers,(2003). Diffusion of Innovations , Fifth Edition 2003, Free Press,
New York, p221
Grant RM, Jammie AP, Thomas H (2008). Diversity, Diversification and Profitability among British Manufacturing Companies, 1972 – 84; Academic Management Journal Vol. 31(4): 771 – 801.
Grinyer PH, Peter M, Massond YA (2008). Market, Organizational and Management Correlates of Economic Performance in the UK. Electrical Engineering Industry, Strategic Management Journal. 9: 297 – 313.
Hamel, G. and Prahalad, C.K. (2014), “Competing for the future”, Harvard Business Review, Vol. 72 No. 4, pp. 122-128.
Hill, C.W. L., Hitt, M.A., Hoskisson, R.E. (2012) Cooperative versus competitive structures in related and unrelated diversified firms. Organization Science, 3(4), 501- 521.
Kotler, P., and Armstrong, G. (2010). Principles of Marketing. Prentice-hall.
Meyer, J. and Rowan, B. (1991) ‘Institutionalized Organizations: Formal Structure as Myth and Ceremony’ in W. Powell and P. DiMaggio (eds) .
Ndubi, T.M. (2012).Strategic responses of Saccos to changing operating environment. A study of Nairobi Province KUSCCO affiliated Saccos (Unpublished MBA project). University of Nairobi, Nairobi, Kenya
Nesbitt SL, King RR (2009). Business Diversification – Has it taken a bad rap? Mergers and Acquisition, November – December.
Pavlou, P.A. and El Sawy, O.A. (2011), “Understanding the elusive black box of dynamic capabilities”, Decision Sciences, Vol. 42 No. 1, pp. 239-273.
Pride, W. and Ferrell, O.C. (Eds). (2008). Marketing, Basic Concepts and Decisions. Boston: Houghton Mifflin Company.
Kaplan, R.S. and Norton, D.P. (2012), “Measuring the strategic readiness of intangible assets”, Harvard Business Review, Vol. 82 No. 2, pp. 52-63.
Kaplan, R.S. and Norton, D.P. (2012), “How to implement a new strategy without disrupting your organization?”, Harvard Business Review, Vol. 84 No. 3, pp. 100-109.
Markides, C.C., Williamson, P.J. (2012) Corporate diversification and organizational structure: A resource-based view. Academy of Management journal, 39(2), 340-367.
Mpungu, A.M. (2013). Strategic responses to changing environmental conditions. A case of AAR Health Services Ltd (Unpublished MBA project). University of Nairobi, Nairobi, Kenya.
Sanchez, R., Heene, A. (2007) Competence-based strategic management: concepts and issues for theory, research, and practice’, in Heene, A. & Sanchez, R. (Eds.). Competence-Based Strategic Management. Chapter 1, 3-42. Wiley & Sons, New York.
Teece, D.J., Pisano, G. and Sheun, A. (2007), “Dynamic capabilities and strategic management”, Strategic Management Journal, Vol. 18 No. 7, pp. 509-523.
Teece, D.J., Pisano, G. and Sheun, A. (2007), “Dynamic capabilities and strategic management”, Strategic Management Journal, Vol. 18 No. 7, pp. 509-523.
Tolbert, P. S. and Zucker, L. G. (1996). The Institutionalization of Institutional Theory? In S. R. Clegg & C. Hardy & W. R. Nord (Eds.), Handbook of Organization Studies: 175 -190. London: Sage
Rigby, D. (2012), “Look before you lay off”, Harvard Business Review, Vol. 80 No. 4, pp. 20 21.
Shah, P.P. (2010), “Network destruction: the structural implications of downsizing”, Academy of Management Journal, Vol. 43 No. 1, pp. 101-112.
Tsai, P.C.F. and Yen, Y.F. (2008), “A model to explore the mystery between organizations’ downsizing strategies and firm performance: integrating the perspectives of organizational change, strategy and strategic human resource management”, Journal of Organizational Change Management, Vol. 21 No. 3, pp. 367-384.
Wernerfelt, B., Montgomery, C.A. (2008) Tobin’s q and the importance of focus in firm performance. American Economic Review, 78, 246-250.
Wright, P.M., Dunford, B.B. and Snel, S.A. (2011), “Human resources and the resource-based view of the firm”, Journal of Management, Vol. 27 No. 6, pp. 701-722.
Zhou, K. and Li, C.B. (2007), “How does strategic orientation matter in Chinese firms?”, Asia Pacific Journal of Management, Vol. 24 No. 4, pp. 447-466
DOI: http://dx.doi.org/10.61426/sjbcm.v2i1.101
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.