Strategic Management Capabilities and Performance of Commercial Banks in Kenya

Abstract: The study sought to determine the influence of strategic management capabilities on the performance of commercial banks in the Nairobi County. The specific objectives of the study involved; to establish the influence of management capability on performance of commercial banks in Nairobi county; the influence of marketing capability, financial capability on performance of commercial banks in Nairobi county; and finally to determine the influence of technological capability on performance of commercial banks in Nairobi count. The study deployed descriptive research design. The study was anchored on three theories; Resource Based View Theory, Competitive Advantage Theory and Dynamic Capabilities Theory. From a total population of 42 commercial banks with 902 line managers in the head offices that is middle and senior level, A sample of 270 respondents was used. The data was analyzed using SPSS software. Descriptive statistics such as tables, Pearson’s correlation and regression were used in analyzing the data. The study found out that appropriate application of each of the four strategic management capabilities positively and significantly influence the performance of commercial banks in Kenya. Of the four strategic organizational capabilities, it was established that managerial capability has a weak negative relationship with the performance of commercial banks. The findings indicated that the collaborative decision making process is very important in the bank performances as well as nurturing creativity and innovation among employees. It was also apparent that the various banks use different strategies in the evaluation of the level of achievement of the set targets. In addition, it was clear that, marketing research played a big role in banks performance as the banks were able to introduce products that met customer’s needs. The key aspects of banks financial capability was proper cash management which ensured continued business with minimal interruptions and timely payment of bills. The study found out that technological capability as a strategy to reach unbanked and to ease banking queues which in turn increased sales. Effective strategic management capabilities have direct influence on the performance of commercial banks. The study recommended that commercial banks should continuously engage in updating their systems to remain relevant in the market engage in creating visions and missions statements that spell their strategic focus in the future. The study also recommended that commercial banks should have market policy framework which sensitive to the action of rival banks and activities in the financial market plan on effective performance strategies to evaluate the achievement of performance targets. From the findings, the study concluded that appropriate application of strategic organizational capabilities and accurate response to market dynamics enhances the performance of commercial banks in Kenya. 

Keywords: strategic management capabilities, strategic managerial capability, financial capability, marketing capability, technological capability, performance.

Title: Strategic Management Capabilities and Performance of Commercial Banks in Kenya

Author: Julius Kiarie Mwangi, Dr. Jane Queen Omwenga

International Journal of Social Science and Humanities Research 

ISSN 2348-3156 (Print), ISSN 2348-3164 (online)

Vol. 10, Issue 4, October 2022 - December 2022

Page No: 48-69

Research Publish Journals

Website: www.researchpublish.com

Published Date: 06-October-2022

DOI: https://doi.org/10.5281/zenodo.7152748

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