Key Account Management Practices, Market Sensing Capabilities, Organisational Characteristics and Performance of Commercial Banks in Kenya

Abstract

The broad objective of this study was to determine the influence of key account management practices, market sensing capabilities, and organizational characteristics on performance of commercial banks in Kenya. The specific objectives were to: establish the influence of Key Account Management Practices on Performance of commercial banks in Kenya; assess the effect of market sensing capabilities on the relationship between key account management practices and performance of commercial banks: establish the influence of organizational characteristics on the relationship between Key Account Management Practices and Performance of commercial banks and to determine the joint effect of Key Account Management Practices, Market Sensing Capabilities and Organizational Characteristics on Performance of all 42 commercial banks in Kenya. The study is grounded using the relationship marketing theory, the dynamic capabilities theory and the resource dependence theory. A descriptive cross-sectional study design was used. Primary data was collected using semi-structured questionnaires. Secondary data were collected from relationship mangers of commercial banks. Analysis was done using correlation and regression analysis to test the relationships between the study variables. Results revealed a statistically significant relationship between Key Account Management Practices and Performance (Adj.R2=0.243, Sig=.002). Market Sensing Capabilities were also found to significantly mediate the relationship between Key Account Management Practices and Performance (Adj.R2=.256, Sig=0.000). Organizational Characteristics on the other hand were found to have a significant moderating influence on the relationship between Key Account Management Practices and Performance (Adj. R2= 0.382, Interaction β = 1.533, p < 0.05). The joint effect of Key Account Management Practices, Market Sensing Capabilities and Organizational Characteristics on Performance was found to be statistically significant. The study has made contribution to theory, policy and management in relation to relationship marketing generally and key account management specifically. The study recommends the adoption of the dimensions of Key account management because they have been found to influence performance. The study has certain limitations; a single respondent was used in data collection which may bias the responses; the study was cross- sectional in design and therefore data was collected at only one point in time which may also bias the findings and the fact that the study was conducted within a subsector within the service sector which has certain peculiar characteristics. For future research directions, the study recommends among others that longitudinal studies be conducted.