Effect Of Strategic Implementation on Organizational Performance of Commercial Banks in Meru County, Kenya

Abstract

An increment of non-performing loans within the commercial banks, have negatively affected the implementation pace of new strategies in branches such as in Meru. The general objective was to examine the influence of strategic implementation on organizational performance of commercial banks in Meru County, Kenya. The specific objectives were to evaluate the influence of resource allocation, strategic alignment, process development and change management on organizational performance of commercial banks in Meru County, Kenya. The four theories of the study are theory of management by objectives, theory of change, resource-based view theory, and institutional theory. Descriptive research design was used to collect data from 19 registered commercial banks in Meru County, as the unit of observation. The respondents were 19 branch managers, and 152 banking staff. In determination of samples, the study used purposive to sample 19 managers and simple random method to sample 91 staff. The study conducted a pilot study in two microfinance banks which are Faulu and Kenya Women Micro finance institutions. Questionnaires were analyzed using SPSS to generate descriptive and multivariate analysis. The interview results will be analyzed by thematic method. The correlation coefficient indicated that resource allocation, strategic alignment, process development, change management had a positive influence on organizational performance. The recommendations on resource allocation are that senior management should ensure that there is impartiality in organizational politics to minimize its interference with even resource distribution among the commercial banking departments. On strategic alignment, the bank management could consider including strategy alignment as an area of concern in the mentorship programs in place. On process development, the commercial bank’s management could consider sensitizing the issue of cyber management within the banking departments. On change management, the management should strengthen its policy framework that ensures that the staff are accorded a chance to be involved in strategic formulation.