The Effect of Financial Deepening on Financial Performance of Financial Institutions in Kenya

Abstract

The objective of the study was to determine the impact of strategic leadership and strategy implementation on performance of commercial banks in Kenya. The data collected from the branch managers, finance mangers, human resource managers and heads of sections of commercial banks was analysed using descriptive statistics such as frequencies, percentages, means and standard deviations. The findings were presented using tables and figures.In order to establish the the effect of organizational structure, leadership, organizational culture, resources and environment on the performance of commercial banks in relation to strategy implementation, regression analysis was carried out using Statistical Package for Social Sciences (SPSS).The study established that leadership affects strategy implementation and performance among commercial banks in Kenya to a very great extent. Organizational structure, organizational culture, resources and environmentaffect strategy implementation and performance among commercial banks in Kenya to a great extent. On the extent to which strategic leadership, strategy implementation and performance apply to commercial banks in Kenya, the study found out that strategy implementation applies among commercial banks to a great extent. On whether there is a positive relationship between, Strategic leadership, strategy implementation and performance among commercial banks in Kenya, the study found out that there was a high level of positive relationship between, Strategic leadership, strategy implementation and performance among commercial banks in Kenya.The study concludes that leadership affects strategy implementation and performance among commercial banks in Kenya to a very great extent while organizational structure, organizational culture, resources and environmentaffects strategy implementation and performance among commercial banks in Kenya to a great extent. On the extent to which strategic leadership, strategy implementation and performance apply to commercial banks in Kenya, the study concludes that strategy implementation applies among commercial banks to a great extent. On whether there is a positive relationship between, strategic leadership, strategy implementation and performance among commercial banks in Kenya, the study concludes that there was a high level of positive relationship between, strategic leadership, strategy implementation and performance among commercial banks in Kenya.The study also concludes that there is strong relationship (R= 0.723) between organizational structure, leadership, organizational culture, resources, environment and performance of commercial banks in Kenya. Further, the study concludes thatorganizational structure, leadership, organizational culture, resources and environmenthave a positive and statistically significant effect on the performance of commercial banks in Kenya and accounts for 45.8% of the total variance in commercial banks performance.This study therefore recommends that the shareholders of performance of commercial banks in Kenyashould establish organizational structure and leadership structures that encourage improved performance. The study also recommended that the management of commercial banks in Kenya should establish an organizational culture and business environment that enhances commercial banks performance. The shareholders should also avail enough resources to facilitate the banks operations.