Influence of Strategic Management Practices on the Growth of Commercial Banks in Kenya

Abstract

Strategic management is a concept that concerns with making decisions and taking corrective actions to achieve long term targets and goals of an organization. The importance of strategic management in a firm can be answered by analyzing relationship between strategic management and organizational performance. Generally strategic management practices can improve efficiency in various organizations. The purpose of the study was to establish the influence of strategic management practices on the growth of the commercial banks in Kenya. The study adopted a descriptive census survey of all the commercial banks in Kenya. The population of interest was all the commercial banks in Kenya. The data was collected through primary data using semi-structured questionnaires containing both open and closed ended questionnaire. The data was analyzed using descriptive statistics such as means, standard deviation percentages and frequency distribution. Correlation analysis was also conducted to establish the influence of strategic management practices on growth of the commercial banks. The study established that commercial banks practice environmental scanning to a large extent and on specific environmental scanning customer analysis was indicated first as most practiced of the analysis. The study also established that commercial banks in Kenya have formulated various business growth strategies. These include differentiation and cost leadership as the main strategy, and others practiced to large extent are market penetration, market development, product development, and diversification strategies. The study concludes that the commercial banks experienced growth mainly in growth indicators like profitability, customer numbers branch network, Assets, technology and bank products. The study further concludes that the strategic management strategies formulated have a strong positive influence on the growth of these commercial banks.