| dc.description.abstract | Strategic planning has its roots in Greek mythology and refers to the process of setting longterm
organizational objectives, developing and executing plans to achieve these objectives,
and providing financial and non-financial resources, necessary for realizing these objectives.
Strategic planning is a process that involves three stages. The first stage involves identifying
an organization’s vision and mission, and conducting an analysis of the organization’s
strengths and weaknesses as well as potential opportunities and threats. The second stage
involves implementation of the action plan, and the third stage involves monitoring to
identify successes or failures. Organizations that undertake strategic planning build
teams with a common vision and are able to keep in motion a dynamic process that allows
them to continually reassess, confront change, and grow within an agreed-upon framework.
They are able to make more informed decisions that anticipate both short-term and long-term
consequences, and also demonstrate significant improvement in sales, profitability and
productivity. Reasons given by organizations that do not undertake strategic planning
include: costs related to staffing, facilitation, venue, transportation or materials, the
complexity associated with the language, terminology, conceptual requirements of strategic
planning, and the need to acquire resources needed for short-term operations before
embarking on long-term goals. Equity Bank Kenya Limited is a publicly listed commercial
bank in Kenya and is the largest bank in the East African region in terms of customer base.
The bank operates in Uganda, Tanzania, South Sudan and Rwanda. The study’s objective
was to establish the relationship between the bank’s profitability and the use of strategic
planning. Profitability is the state or condition of yielding a gain and is the primary goal of
all business ventures. It is measured by comparing income with expenses. The research
question was: Is there any relationship between the bank’s profitability and its use of
strategic planning? The study made use of an interview guide to collect primary data from
five respondents. The bank’s Company Secretary and Director of Corporate Strategy, Chief
Officer - Finance, Innovation and Technology, Director Customer Experience, Research and
Development, Director of Operations, and Director of Treasury and Trade Finance were
interviewed. Secondary data was also obtained by reviewing the bank’s publications and
annual reports. Data was analyzed through content analysis, a technique that makes use of
codes to draw out connections between words and tries to explain the possible meanings of
the words in context. Two main findings emerged. First, there was evidence to suggest that
the bank made use of strategic planning. The fact that there was a director in charge of
strategy formulation and execution in the bank, and that there existed several teams that were
tasked with implementation of various strategic initiatives corroborated this suggestion.
Various strategic initiatives were in place. These included: global partnerships, regional
expansion, staff development, brand visibility, and rollout of mobile banking and agency
banking services. Secondly, as a result of execution of these strategic initiatives, the bank had
maintained an upward trend in terms of profitability. The average rate of growth per year in
profitability between the year 2008 and 2013 had been 32.2%. In the first half of the year
2014, Profit before Tax increased to Kshs. 10.8 billion up from Kshs. 8.9 billion recorded for
the same period in year 2013. The study therefore concluded that a relationship indeed
existed between the bank’s profitability and its use of strategic planning. | en_US |
