Strategy implementation practices and organizational performance in commercial banks in Kenya

Abstract

With the dynamic environment in which organizations are operating in today, strategy implementation is vital as it ensures optimal organizational performance. Strategy implementation ensures an organization remains competitive and without implementation even the most superior strategy is rendered useless. Banking environment in Kenya has undergone many regulatory and financial reforms which have resulted to innovation and changed the structure in the sector encouraging conversion of Micro finance Institutions to fully fledged Commercial Banks. The aim of this research was to explore strategy implementation practices and organization performance in Commercial Banks in Kenya. The study sought to establish the different strategy practices adopted by Commercial Banks in Kenya to attain optimal performance. The researcher used a descriptive research design through structured questionnaires targeting all the 43 commercial banks in Kenya. The design was appropriate as it provided insights into the research problem by describing the practices and their influence on performance in detail. Primary data was collected through structured questionnaires to the executives, functional Managers and strategy champions. The data collected was summarized and analyzed using descriptive statistics. The study established that commercial banks in Kenya formulated strategy and had a strategy document in place, and revealed that different Banks adopted different strategy implementation practices with the prevalent practice being performance target. Further, the study revealed that strategy implementation in Commercial banks was not effective and faced challenges such as lack of commitment from the senior managers, inadequate communication of the strategy to all the employees. From the study findings there was a positive correlation between strategy implementation and Organizational performance of Commercial Banks in Kenya, and that the structure played a key role in strategy implementation. To thoroughly understand the industry, the researcher recommends a comparative study to be carried out between one of the successful banks and a least performing bank.This study gives limitations and suggestions for further research. One of the limitations identified by the researcher included lack of commitment by the respondents in answering the questions due to their busy work schedules and a research on another industry recommended to enable arrive at an objective conclusion as regards organization performance.