| dc.description.abstract | Stiff competition has characterised the Kenyan Banking Industry Environment in the past ten
years. The Industry consist of 43 banks offering various types of financial services which are
largely homogeneous, only differentiated either by the product name or just a few features
leading to very stiff competition for market share CBK (2012). It’s in this context that
Dumais (2011) has observed that organizational design and the resulting capabilities are the
last sustainable sources of competitive advantage that are available to firms. Efficient
organisation structures can enable an organisation to reduce the cost of operations, increase
production efficiency, improve the Turnaround Time in decision making and generally
position the organisation better to manage competition in the industry of operation. Pearce
and Robinson, (1997) has observed that in order for organisations to achieve their goals and
objectives, it is necessary for them to adjust to their environment.
Kenya Commercial Bank, the largest commercial bank in East and Central African has
evolved and adjusted continuously to the environment over the last ten years, moving from a
loss making organisation, reporting a loss of Kshs. 3 Billion in 2002 to profit making
organisation reporting a profit of Kshs. 15.1 Billion in 2011Annual Financial Reports(2003 –
2012). During this time, KCB employed as a major strategic response to competition efficient
Organisation Structures. A new IT platform was introduced in 2007 to facilitate the launching
of new products like internet and mobile banking targeting new market segments previously
served by the competition. New partnerships were established as competition begun to be felt
from previously non-traditional quarters like telecommunication companies. New frontiers of
competition like Agency and Micro Banking were opened to widen the market scope and
reach for KCB. There was Branch Realignment to focus on key customer areas and overtake
competitors offering similar products in the industry. The overall KCB’s Organisation
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structure was changed in 2011 to make the organisation more efficient, effective and
competitive in the Industry. The international Division was adjusted and realigned to improve
the speed of decision making and as a result, raised the levels of efficiency in the Division.
All these initiatives were made possible by establishing new or making adjustments in the
organisation structures and thus demonstrating how KCB used Organisation Structures as a
strategy to respond to competition in the ever changing and highly dynamic Kenyan Banking
Industry Environment. | en |
