ORGANIZATIONAL AGILITY AND ORGANIZATIONAL PERFORMANCE OF COMMERCIAL BANKS IN NAIROBI CITY COUNTY, KENYA
Abstract
The business environment globally is dynamic, exerting strong influences on institutions. Strategic management has over time been characterized with variations as a result of the dynamics of organizational management. As such, it remains vital for organizations to have direct or indirect adjustment as regards to those changes posing as threats to their performance as well as survival in Kenya, the commercial banks are responsible for providing transaction services such as withdrawals and deposits, investment options and loan services to the citizens. Due to globalization and evolving technologies, banking institutions in Kenya have been faced with declining performances, increased inflation, competition and new prudential regulations. Various studies have been carried out at different geographical areas, using different methodology and different indicators. This research aims to investigate the influence of organizational agility on the efficiency of commercial banking in Kenya. Specifically, it seeks to explore the effects of innovation agility, information technology agility, and human resource agility on the organizational efficiency of Kenyan commercial banks. The study draws support from institutional, learning organization, and contingency theories. The research design employed was descriptive, and primary data were gathered through the distribution of questionnaires. The target population included 43 commercial banks operating in Kenya, with a proportional stratified sampling technique applied to three tiers. Purposive sampling was used for seven departments, and random sampling was applied to senior managers, IT managers, and HR managers. A pilot test ensured the validity and reliability of the questionnaire, incorporating content validity and Cronbach's Alpha internal consistency test. Statistical Package for Social Sciences (SPSS) facilitated the analysis of data, employing multiple regression analysis and descriptive statistics. The results, presented in tables, indicated that the three-agility metrics—Innovation Agility, Information Technology Agility, and Human Resource Agility—could collectively predict approximately 86.8% of the variance in overall performance. Notably, Information Technology Agility demonstrated a statistically significant positive impact on organizational performance with a coefficient of 0.244. Human Resource Agility had the most substantial positive impact, reflected in a coefficient of 0.509. However, while Innovation Agility exhibited a positive coefficient with performance (0.210), it did not attain statistical significance.
Key Words: Organizational Agility, Organizational Performance, Commercial Banks
CITATION: John, E. K., & Ragui, M. (2024). Organizational agility and organizational performance of commercial banks in Nairobi City County, Kenya. The Strategic Journal of Business & Change Management, 11 (1), 67 – 82. http://dx.doi.org/10.61426/sjbcm.v11i2.2894
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i2.2894
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