EFFECT OF CHANGE MANAGEMENT STRATEGIES ON THE PERFORMANCE OF COMMERCIAL BANKS IN KENYA

Abstract

The banking sector in Kenya has become very volatile following increased political anxieties, competition from new entrants, social reforms, technological advancement and globalization. Following this increased competition, banks have developed various response strategies including activities such as ICT deployment, staff training, strategic partner management and customer relationship management. Despite the heightened competition, performance of commercial banks has continued to be impressive. Could the response strategies adopted by commercial bank be the source of this impressive performance? In the banking industry in Kenya an appropriate and competent strategic capability is a key basis for such effective response strategies. Commercial banks in Kenya have to contend with the dynamics of a changing competitive environment because of increased globalization and internationalization effects. It exerts pressure on Banks to be proactive and to formulate successful strategies that facilitate proactive response to perceived and actual changes in the competitive environment. Strategic responses are ones that are aimed at differentiating an organization from its competitors in a way that is sustainable in the future. This study sought to fill this gap by seeking to establish the effect of change management strategies on the performance of commercial banks in Kenya. Chapter two reviews the theoretical review, conceptual framework, and empirical review, critique of existing literature, research gap and summary of the chapter.  The study is based on the acquired needs theory, customer relationship theory systems theory and agency theory. The study adopted a descriptive cross-sectional survey. The target population of this study comprised all the 40 commercial banks in Kenya. The unit of analysis comprised of 623 management employees working at the head office of Commercial bank in Kenya. A sample of 83 respondents was selected for this study. The questionnaire was the selected instrument or tool for data collection for the study. The study carried out a pilot study to pretest and validate the questionnaire Quantitative data collected was analyzed by the use of descriptive statistics using SPSS (Version, 21) and presented through percentages, means, standard deviations and frequencies. Content analysis was used to test data that is qualitative in nature or aspect of the data collected from the open ended questions. Multiple regressions were done to determine the effect of change management strategies on the performance of the commercial banks in Kenya.  The study found that capacity building strategies positively affected the performance of commercial banks in Kenya. The study revealed that customer relations management strategies positively influenced the performance of commercial banks in Kenya. The study found that strategic partner’s management affects the performance of commercial banks in Kenya. The study revealed that ICT deployment affects the performance of commercial banks in Kenya. The study recommends that there is need for the management of commercial banks in Kenya to continuously train their staff on new banking services. The study also recommends that there is need for the management of commercial banks to adopt customer relationship management strategies; there is need to commercial bank to have proper strategies put in place to manage their strategic partnership.  The study recommends that there is need for the management of commercial banks to design policies and regulations that will encourage deployment of ICT.