Effect of Strategic Leadership on the Performance of Commercial Banks in Kenya

Abstract

This study project embarked on findings out the influence of strategic leadership on performance of commercial banks in Kenya. It used questionnaires that were presented to different commercial Banks in Kenya, out of the 42 banks 33 banks responded, and the respondents included the human resource managers, operations managers and the financial managers. The response rate was 78.57% which is an excellent response for analysis. This research depicts a positive relationship between strategic leadership and performance. Strategic leadership accounts for 87.6% of the variations in financial performance. The elements of strategic leadership form a good synergistic influence on the performance of organizations. The banks which have a vision and mission which are widely shared throughout the organization and can be reflected in the banks activities and have elaborate processes of strategy formulation involving all employees, which results to long term strategies, tend to have clear corporate, business and functional level strategies. If the banks employ competent workforce based on their skills, competencies, experience and develop workflow charts for employees and service delivery charters for customers in strategy implementation. These aspects of strategic leadership correlated positively to the performance indicators expressed in profits, return on assets and equity as they increase marginally. The correlation analysis that was done on the strategic leadership and performance showed that, a significant effect exists between strategic leadership and performance of commercial banks in Kenya. The outcomes are in tandem with other researchers’ findings. This research contributes to the area of literature of strategic leadership and their influence on organizational performance. The researcher recommends that the ethical considerations and competencies should be given a keen attention and on performance a focus on customer satisfaction should equally be emphasized. Additionally another research can be done on the influence of strategic leadership on performance of the county governments as its recommendations can be very valuable.