| dc.description.abstract | Organizations all over the world have realized the need to embrace strategic management to
attain a competitive advantage in pursuit of set objectives. Since change has become a constant,
successful organizations need to implement change continuously and this requires development
of organizational change competencies. Successful organizations are those that implement
turnaround strategies. On this note, the MFI industry has had to evolve over time; the desire to
grow, expand outreach and improve quality of financial services to its target client is a legitimate
and fundamental goal for any financial institution. Thus a clear corporate strategy is critical. The
study focused on the challenges of the implementation of turnaround strategies in the large MFIs
in Nairobi County. However, the study narrowed down to 2 MFIs who have implemented the
turnaround strategy and transformed into Deposit Taking MFIs. Thus the research design
adopted was a case study of the two institutions. Both primary and secondary data was used to
gather information on the topical issue. The respondents were senior managers of the institutions
since they were critical in the formulation of the corporate strategies within an institution. The
respondents highlighted the strategies they adopted and the challenges they faced while
implementing those strategies. They proposed measures that could be adopted by their
institutions for effective implementation of the strategy to attain competitive advantage. The
study findings indicate that transformation process take longer than expected and the cost far
more than the initial estimates. They are also long and complicated processes which call for
ownership from all stakeholders, thus effective communication is a crucial component of any
change process since it is associated with risks and for this reason, it is important that a good
communication strategy is in place, to ensure that the interests of all parties are aligned to the
main corporate strategy. By transforming from a credit only microfinance institution into a
DTM, extensive capacity building is required to develop skills of existing and new employees.
Therefore, those smaller MFIs contemplating implementation of the turnaround strategy have a
great advantage as they already have a working document to refer to. The study recommends that
management should provide full financial support and also carry out extensive capacity building
on the subject of turnaround strategy to have a buy in of all stakeholders owing to the various
challenges highlighted. Lastly, a good governance culture is necessary prior to beginning the
process since it helps to ensure transparency. Some of the implications of the study highlighted
include adoption of a multi sectoral approach and wide consultations in order to develop realistic
guidelines that will ascertain effective implementation of turnaround strategies. This is because
turnaround strategy is more challenging to realize considering that it takes a longer period and
require more resources to stabilize the organizations before profitability can be achieved. Also,
the empirical results will aid theory building testing new and established theories and
frameworks and will either validate or refute the current theories and paradigms. This will
advance strategic management, which is still in the pre-paradigmatic stages. Thus, organizational
competencies and capabilities will always play a key role for successful turnaround strategies;
ideal structures/systems, effective leadership, positive culture, teamwork, efficient mobilization
and utilization of resources and adoption of the rapid changing technology. Therefore,
appropriate combination of these factors will enable companies operate viably while gaining a
competitive edge over their rivals. | en_US |
