| dc.description.abstract | Business entities meet various challenges in the course of their lifetime. While most organizations have since adopted the concept of strategic planning as a way of maintaining focus and direction in respect to the business they are engaged in, many are either caught unawares by some of the changes that take place in the environment or even when they are aware of the changes they fail to respond appropriately to these changes and in the process the very survival of these organizations is put in jeopardy.
Public Development organizations in Kenya were mainly established in the early 1960s in order to provide development vehicles to be used as a means to jumpstart the young republic’s economy after it attained independence. The DFIs were in most cases fully funded by the government and most of the funds the institutions were lending to the business community were obtained through lines of credit from bilateral bodies, through the goodwill of the government.
Recent trends in the global market have seen bilateral bodies insist on very stringent conditions on governments of the developing world when it comes to releasing any funds to them, whether for development or otherwise. Many of these bodies have maintained the position that governments have no business engaging in commercial business and they have stopped providing funds for the public DFIs to continue on lending to the business community. The main argument, especially following the liberalization of the economy, was that the private sector was better placed to drive the economy and to this end there were other vehicles available, like commercial banks, MFIs and even SACCOS to serve the sectors that Public DFIs were serving.
The key objective of this study was to determine the strategic responses that the public DFIs were employing to the challenges facing them. The study first tried to identify the key strategic challenges facing the sector and then went on to find out the key responses that managements in these organizations were employing in order to stay in business.
The study was a census survey of the seven public DFIs as listed in Appendix III. Responses were received from all the respondents and so the findings could be relied on to represent the entire public DFI sector in the country.
The findings pointed to the lack of adequate capitalization, access to raw materials (funds for on lending to clients), and survival as the key strategic challenges facing these organizations. Findings also found out that management of most of these organizations found government decisions and those of bilateral bodies to impact very heavily on their corporate strategies. For strategic responses, most of them were lobbying for government support, engaging in restructuring and cost cutting among others. It was interesting to note that mergers were not rated highly as a strategic response by the respondents and it may be an interesting subject of study to find out why this was so, considering that this is an option that is highly regarded as a means of strengthening the capital base of an organization in the field of strategy.
It is hoped that findings of this research will go a long way in helping both scholars of strategy as well as managers of public DFIs to understand the dynamics that drive this sector and as a result craft strategies that will not only revive the sector but also take it to greater heights. | en |
