Adaptive Capabilities and Performance of Commercial Banks in Kenya

Abstract

This study set out to answer the question of whether or not the flexibility of Kenya's commercial banking sector is a key factor in its success. This investigation is grounded on Miles and Snow's typology as well as the idea of dynamic capabilities. In order to characterize the features shared by the variables, it was chosen to undertake research with a descriptive focus. Forty commercial banks in Kenya with active licenses as of the 31st of December, 2020 were studied in this research. The major source of information was gleaned through responses to a structured survey. Descriptive information on the different indicators of adaptive capabilities and performance was determined to be compiled. Based on the regression analysis, it's clear that adaptability has a major impact on productivity. This study's findings are in line with others that show more flexible organizations beat their less flexible competitors despite the high costs and low efficiency of their approach. This finding is compatible with other findings. The results provide evidence in favor of the postulations made by the dynamic capacities theory. To the degree that they may be used to boost the firm's competitive status in the industry, an organization's adaptable skills can be considered a resource. It is concluded that managers who intend to pursue adaptive capabilities ought to examine the change management of the institution first.Longitudinal measurements are suggested for future studies of commercial bank performance in order to fully capture trends across time. The upshot of this is that a longitudinal research is necessary to elucidate the connection between adaptive skills, which is not a static characteristic. It is also recommended that the indicators of adaptive capabilities namely: change management, horizon scanning and resilience be subjected to independent test in relation to performance. This will probably illuminate on the relationship better.