Aspects of Strategic Planning in Kenya's Financial Sector

Abstract

Formal strategic management can be traced back to the 1950s in the United States of America. With time it increased in popularity and spread abroad (10 several developed countries). As such, most research work on strategic planning is found in developed country contexts. Little research work on strategic planning has been done in the developing country contexts. Even less research is found in the African contexts. With this state of affairs in management, the research set out to document strategic planning practices within the financial sector in Kenya. The aspects of strategic planning looked at comprised; the presence or absence of a mission statement, the existence of set goals and the participants in the goal setting exercise, the mix of plans developed, the presence or absence of strategies! strategic plans and the level at which they are set, the planning horizon, collection and use of competitor and customer information and finally the purpose of planning. The research found that local companies are more inclined to have mission statements than foreign companies. Foreign companies are also more inclined to develop strategic plans than their local counterparts. Further, they also plan over a longer horizon than local companies. I. The local companies plans have a heavier financial bias than foreign companies. Large companies undertake more formal strategy development practices than small companies in the sense that they tend to write out their strategic plans more and consider their competitors more in formulating their strategies. However small companies tend to develop mission statements more than large companies. All the companies in the research regardless of type, ownership and size utilize a market-driven strategy approach. Non-bank financial institutions are more inclined to develop mission statements- than commercial banks. Commercial banks tend to develop strategic plans and plan over longer horizons than non-bank financial institutions. In addition, commercial banks have heavier financial oriented plans than non-bank financial institutions.