STRATEGIC ALLIANCES AND THE PERFORMANCE OF COMMERCIAL BANKS IN KENYA

Kelvin Kamau Mwenda, Dr. Paul Kariuki

Abstract


Performance evaluation encompasses an assessment of all aspects within an organization, including processes, operation, and the human element. Strategic alliances serve as a means to enhance the performance of organizations. In this research, we explored the connection between strategic alliances and the performance of commercial banks in Kenya. The study specifically investigated the impact of strategic alliances on the bank’s performance, with performance being measured using metric such as return on assets and changes in market share. The specific objectives aimed to ascertain the influence of joint ventures and outsourcing practices on the performance of commercial banks in Kenya. This study used a descriptive design with questionnaires used as the instrument for primary data collection and data entry tables used for secondary data collection. With a target population of 40 licensed commercial banks in Kenya, E-Questionnaires were emailed to each one of them. The unit of observation was a marketing Director, information technology Director, investment Director, and a finance Director from each bank. The research conducted a comprehensive survey of the entire target population through a census. Data collection and analysis were carried out using SPSS version 25, resulting in the generation of frequency distributions. Both descriptive and inferential statistics were employed to draw conclusions. The study utilized multiple regression analysis to establish the correlation between strategic alliances and the performance of commercial banks in Kenya. The findings of this research yielded critical insights into the impact of strategic alliances on the performance of commercial banks. Specifically, the study revealed that joint ventures, and outsourcing had a positive and significant effect on the performance of commercial banks in Kenya. Therefore, it is recommended that commercial bank directors should consider embracing joint ventures, as they enable banks to tap into larger markets, ultimately increasing profitability and competitiveness. Lastly, the study suggests that commercial banks should adopt outsourcing practices to allow them to focus on their core business activities.

Key Words: Strategic alliances, Joint ventures, Outsourcing practices, Commercial banks


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References


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