Corporate sustainability strategies by commercial banks in Kenya
Abstract
Within the first decade of the 21st century, society begun to demand that firms carry out policies
that move toward sustainable development. The sustainability philosophy assumes that firm
directors and management should abandon a narrow version of classical economic theory and
develop corporate strategies that include goals that go beyond just maximizing shareholders’
interests. Attention is directed to the demands of a wider group of stakeholders, since the firm’s
success depends on stakeholder’s satisfaction. With this in mind, this study sought to achieve
three main objectives: to identify corporate sustainability strategies adopted by commercial
banks in Kenya , to identify the different stakeholders groups that the banks incorporate in the
CSS and to establish the benefits of CSS to the commercial banks in Kenya. Using a sector wide
approach of the 43 banks in Kenya, the research retrospectively covered sustainable
developments within the last five years. The respondents were the key officers involved in
strategy implementation: chief operations officers and the head of sustainability in each of the
banks. The research study was carried out with the use of the questionnaires. The questionnaires
used also comprised sections of questions relating to the three objectives of the research study.
The questionnaires from the respondents totaled 35 (out of 86) which represented 41.6 %
response rate. It was noted that banks tended to place value on immediate goals which translated
to profit centers for the firms through taking advantage of business opportunities that arose with
the achievement of CSS, hence there was a great emphasis across the banks on market driven
CSS of: tailor-made capital investments, efficient operations standards and process and
technology transfer. In addition, the government and the local community were identified as the
key drivers of the sustainability strategies in the banking industry. This pointed to a growing
need for the banks to reduce on their exposure to punitive regulatory decisions through a
proactive role in CSS. Key recommendations from the study stress on the need for commercial
banks in Kenya to make CSS a more definitive experience for customers by giving more
emphasis on the commercial banks clientele. This will go a long way in delivering the banks
missions and visions and at the same time satisfying commercial banks stakeholders needs
Employees also play a major role in the day to day operations of the commercial banks and
therefore sustainability strategies adapted by commercial banks should always encompass the
employees as key stakeholders. There is need to place a premium on the way they are trained
as well as allocating enough monies to aid in employee training and taking care of their training
needs in relation to driving the CSS agenda. The study can be extended to a wider scope which
will cover the role of finance function in driving company strategy, impact of operational and
market driven strategies from a demand point of view and implications of CSS to end users and
or consumers within the commercial banking industry in Kenya.
Citation
A research project submitted in partial fulfillment of the requirement for the award of master of business administration degree, school of business, University of NairobiPublisher
Business Administration, University of Nairobi