Determinants of Organisational Performance by Tier Three Commercial Banks in Kenya

Abstract

The Banking sector has undergone significant transformation and continues to improve with new regulations and guidelines seeking to maintain stability. The objective of the study was to establish determinants of organization performance in Kenya banking sector with special focus on tier three Commercial Banks. The research adopted a descriptive survey design on a population of the 43 commercial banks in Kenya. The study utilized both primary and secondary sources of data. Data analysis was done using the facilities for descriptive methods on the Statistical Packages for Social Sciences (SPSS). Based on the findings in relation to specific objective, the study concluded that majority of the organization perceive that alleged that corporate governance affects organization performance. Also the study concluded that companies had put in place effective corporate governance systems that shown to implement solid and integrated performance approaches more easily than others and that management in their organization are committed in ensuring the performance of the bank is improved. Likewise, the study concluded that management most organization consider merit and previous performance of the individual to be mandated in the management position and that bank shares more democratic ownership structures, more balanced and broader governance systems, and a more comprehensive view of organizational goals and performance have also better chances to increase shareholders’ loyalty. Finally the study found that management is committed hence influencing bank performance to a great extent. To technologies advancement, the study concluded that technologies advancement enhancement bank performance where it eases the process and procedure of banking. On bank size, the study concluded that most of the banks had 16-30 branches where number of branches that bank have determines its profitability. Loans from us hence low interest income. Inclusively, the study established that bank size determines bank profitability to very great extent. To financial strategies adopted by the banks, the study concluded that investment management strategy and cash flow management strategy were the main financial strategies adopted by most of tier three banks in Kenya. Keywords: Corporate governance, firm size, financial strategy, technology advancement