Influence of Corporate Restructuring on Organizations Performance: A Case of Kenya Commercial Bank

Abstract

Organizational restructuring is inevitable for any organization that is focused on dealing with competition and day to day organizational challenges. It is critical that organizations implement restructuring carefully if they are to survive. The general objective of the study was to investigate the influence of corporate restructuring on organizations performance with specific focus on Kenya Commercial Bank. The study was guided by the following specific research objective; to determine the influence of operational costs, organizational structure, and management style and workforce size on performance of Kenya Commercial Bank. The study was hinged on the following theories; Kaplan theory; stakeholder’s theory; Weick's model theory of organizing; traditional organizational theory. This study adopted a descriptive design. A sample was drawn from the targeted employees at the Kenya Commercial Bank headquarters Nairobi. A sample population of 261 is arrived at by calculating the target population of 813 with a 95% confidence level and an error of 0.05 using the below formula taken from Kothari (2004). Primary data was collected by administering a semi-structured questionnaire. Data collected was analyzed using descriptive statistic such as mean, frequencies, percent and standard deviation and findings presented using tables. The study results revealed that restructuring of consultancy fees enhances efficiency and that institution maximization on information technology expenses boosts customer satisfaction. As per the results, it has been revealed that an efficient knowledge management system enhances bank stability and growth and that, employees that are given leadership opportunities through delegation enhances their service delivery. Further, the finding showed that recognition of various departmental responsibilities improves internal operations as indicated. However, the finding showed that rarely organization workers are recognized for initiative and creativity hindering staff development. From the finding, it was revealed that if staff in organization is adequate it highly enhances quality service delivery. The findings from this research showed that infrastructure development has highly contributed to customer service quality and that top-down communications in the bank has greatly improved their business operations efficiency. However, the finding showed that customer focus orientation of the bank has improved the level of satisfaction of customers. Management in the bank should adopt corporate restructuring in order to improve the employee’s motivation through appointing senior managers to head a number of merged departments and offer better packages such as improved salaries and human resources training as well as research and development on how to improve financial deliver)’ services and implement restructuring. The study also recommends that the same study should be done based on other commercial banks in Kenya to establish the effect corporate restructuring on organizations performance of registered commercial bank in Kenya.