Relationship between growth strategy and organization structure of commercial banks in Kenya

Abstract

The main objective of this study was to establish the relationship between growth strategy and organization structure of commercial banks in Kenya. Achieving performance excellence is a continuous dynamic process and various financial institutions are employing diverse growth strategies to achieve high performance levels. A good growth strategy needs a well laid down organization structure so that it is possible for strategy to be well implemented. The literature review focused on the concepts of growth strategy and organization structures. It also reviewed the established theories on growth strategies and organization structure and the empirical findings on the relationship between growth strategy and organization structure. The study adopted a descriptive survey design and collected primary data by use of questionnaires given to commercial banks in Kenya. The research was conducted through a descriptive survey design and a total of 54 respondents. Questionnaires were administered to each of the respondents at their work stations and collected. The collected data was cleaned and coded before being analyzed by use of the Statistical Package for Social Sciences (SPSS). The data analysis techniques included descriptive statistics like the mean, percentages and standard deviation. In addition, inferential statistics like regression analysis were also used to establish relationships between the dependent and independent variables. The findings were presented in tables and bar graphs. Major research findings indicated that the nature of organization structure had a high effect on the performance of employees, compliance wit h regulations and attainment of community expectations. The findings also indicated that the nature of organization structure had a moderate effect on the attainment of bank communities‟ expectations and growth of investments of major commercial banks in Kenya. The main conclusion was that the nature of organization structure affected the effectiveness and efficiency of strategy implementation among the selected major commercial banks in Kenya. The researcher recommends improvement of organization structures through enhanced communication, involvement of employees in decision making, relevant training of employees and flexibility of policies and regulations related to strategy implementation. The researcher suggests that a similar study be carried out to come up with a model to guide the establishment of an appropriate organization structure that can assist in ensuring that organizations attain their strategic objectives and respond to environmental changes in a cost effective manner.