Effect of Change Management on Performance of Commercial Banks in Kenya

Abstract

The objective of the study was to establish the influence of change management on performance of Commercial banks in Kenya. The study was to confirm or validate the existing theories in change management. The study was guided by the Three-step change theory and Phases of change theory where the three step change theory is the anchoring theory. The researcher used descriptive survey research design method where data was systematically collected and analyzed in line with the research questions concerning the commercial banks in Kenya. A census study targeting all the 42 commercial banks was done. Out of the 42 targeted banks, only 23 responded translating to 54.76% response rate. The managers offered primary data and responded through questionnaires. The questionnaires comprised of likert scale questions. The analysis of data was done using percentages, mean scores, standard deviations or by use of simple analysis of variance. Data was also analyzed through descriptive and inferential statistics. The data was tabulated in the form of statistical tables for further analysis. Regression analysis was done to establish the relationship between the change management practices and the performance of the Kenyan commercial banks, using coefficient of determination which explains how variations in change management practices influences the performance of the banks. The data was summarized and organized in a manner that answers the research objective. It was concluded that changes in organizational structures, changes in leadership, changes in technology, changes in the emotional dimensions self-awareness, self-management, social-awareness and, changes in communication structures and changes in HR policies influence the performance of Kenyan banks However changes in emotional intelligence dimensions, self-management, self-awareness and social awareness had little effect as compared to other change management variables. The researcher recommended that the banks should have a strong, committed and visionary leadership with temperament and skills to manage the change strategies; respond to the rapid changes by continuously building on the existing IT systems; develop proper communication systems to communicate new visions and strategies; and develop and strengthen policies that encourage employees to work together as a team among other recommendations.