Determinants of Strategic Drift and Their Effect on Performance of Commercial Banks in Kenya
Abstract
The current business age is characterized by a constantly changing environment caused by
external and market factors which drive all sorts of change impacting business
performance. Hence there is need to re-evaluate strategy constantly and align it with the
changes in the environment. This not only enables them to survive in the turbulent
environment but also enhance organizational performance. The main objective of this study
was to establish the determinants of strategic drift and their effects on the performance of
commercial banks in Kenya. The study reviewed theories related to the topic as well as the
relevant empirical literature focusing on the studies that have been done by other
researchers guided by the specific objectives. Descriptive research design was used in the
study because it gives a detailed description of events, situations and interactions between
people and things with minimum bias. The target population was all the 43 commercial
banks in Kenya. Questionnaires were used to collect data and contained mainly closed
ended questions structured on a five-point Likert scale. Descriptive statistics was used to
analyze data with the aid of Scientific Package of Social Science and MS Excel. The
analyzed data was presented in frequency tables, graphs and charts. The findings indicated
that the main determinants of strategic drift are strategic planning, leadership,
responsiveness to change, culture, organizational climate, innovation and communication.
The study concluded that the process of strategic planning should be consultative to ensure
that the structure aligns with the strategy. Also, in case of strategic drift, the key is
flexibility and that banks have to know how to manage change. The management has to fill
the gap between what is planned and what is done. Hence, the study recommends that the
management team of commercial banks in Kenya should conduct proper analysis of the
environment to be able to detect slight changes and hence make necessary strategic
adjustments. They have to communicate the strategy in order to enhance attainment of
organizational objectives and improve the performance of the bank. In addition, the
management should align their organizational structures with strategic objectives to allow
for efficiency in service delivery to customers and allow for adaptability to changes in the
business environment.
Publisher
University of Nairobi