Response strategies to environ ment al challenge s by commercial banks in Kenya

Abstract

Organizations face environmental challenges and to survive they must adopt appropriate responses. Commercial banks in Kenya face challenges from their external environment. The study so ught to identify the challenges commercial banks face in their external environment and how they respond to those challenges. The study was a survey of all the commercial banks in Kenya. The findings were that commercial banks in Kenya face political, econ omic, technological and socio - cultural challenges in their operations. The commercial banks respond to these challenges by appropriate responses such as diversification, cost leadership, mergers and acquisitions and outsourcing. The study concludes that to survive , commercial banks in Kenya need to respond appropriately to the environmental challenges they face. Based on the findings, it is recommended that commercial banks should constantly identify the environmental challenges they face in the political, technological, socio - cultural and economic arena and adopt appropriate responses to those challenges in order to survive in a highly competitive market. The study faced limitations in that it focused on ly on commercial banks and did not cover the whole ban king industry including cooperative societies, micro - finance institutions and mortgage companies. Suggestions for further research include an industry study to cover all the members of the industry including commercial banks, micro - finance companies, coope rative societies and mortgage companies to identify industry specific challenges. Further research can also be done on the impact of mobile and internet banking on the banking industry and how the industry has responded to that challenge