Strategic Management Practices and Performance of Commercial Banks in Kenya: a Case Study of SBM Bank Kenya

Abstract

While every organization has to set out a vision, they also have to come up with strategies that align with it with an aim of improving productivity and performance, increasing competitiveness, decreasing costs and improving quality. Strategic management techniques, in particular, have been described as critical for increased output and competitiveness because they boost productivity in terms of production and apportionment of goods and services within the enterprise. The banking industry has adopted insular processes of business process redesign, rebranding and transformation. To ensure both survival and success, banks should employ strategic management practices that strive to maintain a constant balance between the firm and the market environment. The study sought to establish the effects of strategic management practices on performance of banks in Kenya in reference to SBM Bank Kenya. The study focused on the effects of strategic intent, strategic planning, strategy evaluation, environmental scanning, and strategy control on the performance of banks. The study was anchored on dynamic capabilities theory and supported by the resource-based theory (RBV) and contingency theory. A case study design was adopted. The study used both primary and secondary data. Primary data was collected using interview guides. The research data and information was collected from the nine senior management at Kenya SBM Bank including the director of sales and marketing, director of operations, director of supply chains, director of information system, director of customer service, director of finance and director of human resources. A conceptual content analysis was employed. The interviewees' perspectives on the impact of strategic management practices on bank performance in Kenya, with a focus on SBM Bank Kenya, was analyzed using content analysis to extract common themes or data from the various responses received. The study found that the strategies used in the banks included commissioning right products to maximize stakeholders returns, crafting a holistic mission and vision statement that is shared to all staff compliment and clearly displayed to both internal and external prospects, and partnering with other bodies /corporates to support in strategy awareness. Also, the study found that the bank deals with unforeseen market economic changes that may distort the actualization of the plans by: continuing to survey the plans each quarter to make changes educated by market and working climate changes. The study also found the strategies have been greatly applied and achieved through profit margins to an extraordinary reach out in choppiness circumstances such as presently. The study also found that managers ensure that the strategy is consistent with conditions in the competitive environment through continuous measurement of strategy – performance and alignment of initiatives vs. strategic plan. The study also found that the bank enhances communication of information about organizational change before and after about organizational developments through active staff engagement using KIP sessions. The study concluded that strategic intent, strategic planning, strategy evaluation, environmental scanning, and strategy control affect the performance of banks. The study recommends that top management in banks to ensure that they support any implementation taking place in the organization. The study also recommends banks to embrace effective and efficient forms/channels of communication.