Strategic Change Management and Performance of Commercial Banks in Kenya

Abstract

The understanding of the aspects which have an influence on how commercial banks perform is important because the banking industry plays a vital part in the distribution of economic resources and growth of economy through the provision of funds to borrowers and by increasing the deepening of finance in the country. The research was conducted to investigate the influence of change management practices on the performance of commercial banks in Kenya. The particular predictor variables of change in the commercial banks investigated were change practices in the areas of organizational culture, technology, organization structure and leadership; whereas the balance score card perspectives were used to investigate performance of the commercial banks. The research implemented a descriptive research design on a census of all commercial banks in operations in Kenya, though the participating banks whose data was collected were 35. The analysis was undertaken using descriptive measures of mean and standard deviation while the data was presented using tables. The results of the study reveal that most banks in Kenya are locally owned and have been in operation for over 20 years. The predictor variables were found to explain 37.4% of the bank performance and that the model depicting the connection was significant since the p-value was 0.006. In regard to the individual predictor variables, the findings reveal that all the coefficients had positive coefficients implying that the undertaking of the change process by an organization results in improved performance of the bank. However, only the leadership and organizational culture change practices were significant since their p-values were less than 0.05. On the other hand, technological and organizational structure changes were found to be insignificant to the performance of the commercial banks. The research accomplishes that continuous change management practices is recommended for commercial banks and no one form of change is sufficient, but rather a combination of changes.