Factors influencing strategic management practices among commercial banks in Kenya

Abstract

Strategic management practices have gained importance in recent years. During last century organizations focused on long-term planning. Long-term planning supposed that external and internal environment will remain stable for long period of time and thus they made plans for long duration. Today it is clear to the managers and entrepreneur’s that environment can change at any point of time and their plans should follow a strategy that includes contingency planning too. There are therefore a number of both internal and external environmental factors that may influence the strategic management practices of an organisation. This study sought to achieve two objectives: to investigate the current strategic management practices; and to identify factors that influence the banks strategic management practices in Kenya. This was a descriptive study. The population was 43 banks and the response was from 33 banks giving a response rate of 77%. Primary data was collected in the study using questionnaires administered to general managers using email and drop and pick later methods. Data was analysed using descriptive analysis. The most significant factors that were found to influence strategic management practices were technological environment, economic environment, global environment, political and legal environment, bank structure, bank resources, and socio-cultural environment. The study concludes that the level of strategic management practice in commercial banks in Kenya was very high. Further, the strategic management in commercial banks was highly influenced by both internal factors and external factors. The study recommends that there is need for firms to stress on strategic evaluation process as much as they do planning and execution. Banks also need to adopt strategic management models that fit their overall objectives. In so doing, they need to incorporate the internal factors and external factors through SWOT analysis as well as other tools to evaluate environmental challenges