EFFECTS OF OPERATIONAL STRATEGIES ON PERFORMANCE OF COMMERCIAL BANKS IN MAKUENI COUNTY, KENYA
DOI:
https://doi.org/10.47604/ejbsm.1623Keywords:
Debt Recovery, Promotional Strategies, Employee Training, The Quality of Bank Services and Products, and Performance of Commercial Banks.Abstract
Purpose: The purpose of this study was to determine the effect of operational strategies on the performance of commercial banks in Makueni County in respect to banking services. The specific objective of this study was to investigate the influence of debt recovery, promotional strategies, employee training, the quality of bank services and products on the performance of commercial banks in Makueni County.
Methodology: The study used cross-descriptive research design and data was collected using a questionnaire. The target population of this study was bank employees with managerial roles and responsibilities; the bank managers and their assistants. The bank managers and their assistants were targeted because they are familiar and are actively involved in the development of operational strategies of commercial banks. Since the population was small census was used to select all the bank managers and their assistants to form a sample size of at least 130 study participants. The data collected was analysed using descriptive and inferential statistics with the aid of SPSS version 21.
Findings: Both the correlation and regression results revealed that there was a positive and significant relationship between debt recovery, promotional strategies, quality of services and products and employee training and performance of commercial banks in Makueni County. The theories tested in this paper included; resource based view, theory of constrains and contingency theory.
Recommendations: The study recommends that the bank managers should keep on developing and implementing policies which improve on their operational strategies. The quality of their products as it is likely to impact on their performance positively. The government of Kenya should develop strategies to ensure that loans given by commercial banks are paid off to ensure commercial banks remain competitive just like all the other financial institutions in the country. More research needs to be conducted on the specific operational strategies so as to obtain in depth information on how each operational strategy influence performance of commercial banks.
Downloads
References
Aliata, V., Odondo, A., Aila, F., & Ojera, P. (2012). Influence of Promotional Strategies on Banks Performance. International Journal of Business, Humanities and Technology, 2(5), 10.
Allen, F. & Gale, D. (2004). “Competition and financial stability.”. Journal of Money, Credit, and Banking (36), 27.
Arthur, A., Elliot, J., & Elaine, N. (2011). Statistics for Behavioural and Social Sciences. St. Upper Saddle River: New Jersey: Pearson Education Inc.
Becker, B., & Huselid, M. (2010). Strategic Human Resource Management and Job design: Narrowing the divide. Journal of Organizational Behaviour. 31(2), 9.
Bhole, M. L. (2009). Financial Institutions and Markets; Structure, Growth and Innovations. Vol. 5.
Blasco, J., & King, A. (2017). KPMG Survey of Corporate Responsibility Reporting 2017 (pp. 58). Amstelveen, Netherlands: KPMG.
CBK. (2014). Annual Supervision Report, 2014. Nairobi: Central Bank of Kenya.
Central Bank of Kenya. (2016). Central Bank Of Kenya Directory Of Licensed Commercial Banks, Mortgage Finance Institutions and Authorised Non-Operating Holding Companies. Central Bank of Kenya.
Connelly, L. . (2008). Pilot studies. . Medsurg Nursing., 17(6), 2.
Coyle-Shapiro, Jacqueline, A. & Parzefall, M. (Ed.). (2008). Psychological contracts. London, UK. : SAGE Publications.
Cort, K. T., Griffith, D.A., & White, D.S. (2007). An attribution theory approach for understanding the internationalization of professional service firms, International Marketing Review, 24(1), 9-25.
Dimitriu, D. (2012). Customers Categories and Types of Banking Services. Annals of the University of Petrosani, Economics, 12(2), 7.
Elsinger, H., Lehar, A., & Summer, M. (2010). Risk Assessment for Banking Systems. Journal of Management Science, 52(9), 13.
Equity_Bank. (2010). Annual report and accounts for 2009. Nairobi, Kenya: Equity Bank.
Eshghi, A., Roy S., & Ganguli, S. . (2008). Service Quality and Customer Satisfaction; An Empirical Investigation In India Mobile Telecommunication Services. Marketing Management Journal., 18(2), 25.
Fieldler, F. (2008). Fiedler's contingency theory (Updated version). Leader Attitudes and Group Effectiveness.
Gama, D., & Salah, N. (2011). How to Measure Organizational Innovativeness. Technology, Innovation and Entrepreneurship Centre (TIEC), 38(8), 10.
Glendon, A. I., Clarke, S. G., & McKenna, E. F. (2006). Human safety and risk management (2nd edition). Boca Raton, FL: CRC Press.
Gunasekaran, A., & Sarhadi, M. (2006). Implementation of activity-based costing in manufacturing. . International Journal of Production Economics., 56(7), 42.
Hajra, S. M. (2017). Factors Affecting Debt Recovery in Commercial Banks In Kenya a Case Study at Equity Bank Kenya Limited. Imperial Journal of Interdisciplinary Research (IJIR), 3(10).
Hellman, T., Murdoch, K. & Stiglitz, J. (2000). Liberalization, moral hazard in Banking and Prudential Regulation: Are capital Requirements Enough? American Economic Review (90), 18.
Hoopes, D.G., Madsen, T. L. & Walker, G. (2003), Guest editors' introduction to the special issue: why is there a resource-based view? Toward a theory of competitive heterogeneity, Strategic Management Journal, 24(10), 889-902.
Ivancevich, J., Lorenzi, P., Skinner, S., & Crosby, P. (2007). Management Quality and Competitiveness. (2nd ed.). Boston: McGraw-Hill Irwin.
Johnson, G., Scholes, K., & Whittington, R. (2006). Exploring Corporate Strategy. (7th ed.). London: Prentice Hall.
Katua, N. (2015). Effect of Training and Development Strategies on the Performance of Commercial Banks in Kenya. Journal of Educational Policy and Entrepreneurial `Research (JEPER), 2(7), 25.
Keeley, M. (1990). Deposit insurance, risk and market power in banking. American Economic Review(80), 17.
Kerama L. N. (2003). The Resource Based View of Competitiveness. A Survey of Manufacturing Firms Listed in the NSE.
Korir, M., Sang, W., Shisia, A., & Mutung'u, C. (2015). Financial Innovations and Performance of Commercial Banks in Kenya. International Journal of Economics, Commerce and Management, 3(5), 23.
Kothari, C.R. (2004). Research Methodology: Methods and Techniques. (2nd ed.). New Delhi: New Age International Publishers.
Lawrence, J. (2012). Technological Change Financial Innovation and Financial Regulation in the US: The Challenges for Public Policy. http://citeseerx.ist.psu.edu/viewdoc/ download? doi=10.1.1.155.1655
Maina, A. (2016). Effect of lending practices on financial performance of commercial banks in Kenya: A Survey of selected banks within Nairobi. (MBA), United States International University - Africa, Nairobi, Kenya.
Marcus, A. (1984). Deregulation and Bank Policy. Journal of Banking and Finance (8), 8.
Matutes, C., & Vives, X. (2000). Imperfect competition, Risk taking and Regulation in Banking. European Economic Review(44), 33.
McCraw, T. (2007). Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Belknap Press.
McGuigan, J. (2003). Managerial economics: applications, strategy and tactics. South Western: Educational Publishing.
Mosongo, E., Gichana, I., Ithai, J., & Nguta, M. (2013). Financial Innovation and Financial Performance: A Case of SACCOs in Nairobi County. International Journal of Research in Management, 3(2), 7.
Motlokoa, M. (2018). The Impact of Training on Employees' Performance: The Case of Banking Sector in Lesotho. International Journal of Human Resource Studies, 8(2), 31.
Mugenda, M. & Mugenda, O. (2003). Research Methods: Quantitative and Qualitative Approaches. . Nairobi.: ACTS Press.
Muiruri, I. (2015). The Influence of Branding Strategy on Financial Performance of Commercial Banks in Kenya. (MBA), University of Nairobi, Nairobi, Kenya.
Nelson, W. & Kalani, V. (2009). Commercial Banking Crises in Kenya: Causes and Remedies. Global Journal of Finance and Banking Issues., 3(3).
Nguru, F., Ombui, K., & Iravo, M. (2016). Effects of Marketing Strategies on the Performance of Equity Bank. International Journal of Scientific and Research Publications, 6(10), 8.
Njoroge, P. (2017a). Bank Supervision Annual Report 2017. Nairobi, Kenya: Central Bank of Kenya.
Njoroge, P. (2017b, January, 2017). Interest Rate. , The East African. Retrieved from http://www.eastafrican.co.ke
Noe, R. (2008). Training and Development. (4th ed.). New York.: McGraw-Hill.
Odeny, B. (2016). The Influence of Service Quality on Performance of Barclays Bank of Kenya Limited. (MBA), University of Nairobi, Nairobi.
Onditi, A., Oginda, M., Ochieng, I., & Oso, W. (2012). Implications Of Service Quality On Customer Loyalty In The Banking Sector. International Journal of Business and Social Science, 3(21), 11.
Porter, M. (2006). What is strategy? Harvard Business Review, 74.
Saunders, M., Lewis, P., & Thornhill, A. (2004). Research Methods for Business Students (5th ed.): Prentice Hall.
Schwab, K. (2017). The Global Competitiveness Report 2016-2017. Cologny, Switzerland: World Economic Forum.
Sheelah, Kolhatkar &. (2018). McKinsey's Work for Saudi Arabia Highlights its History of Unsavory Entanglements. The New Yorker.
Shipho, T. (2011). Effects of Banking Sectorial Factors on the Profitability of Commercial Banks in Kenya. Economics and Finance Review, 5(1), 30.
Slack, Nigel & Lewis, Michael. (2002). Operations Strategy.
Solans, E. (2013). Financial Innovation and Monetary Policy. Paper presented at the 38th SEACAN Governors Conference and 22nd Meeting of the SEACAN Board of Governors on Structural Change and Growth Prospects in Aisa-Challenges to Central Banking, Manila.
Thompson, N. (2004). Innovativeness and performance: evidence from manufacturing sectors, Journal of Strategic Marketing(12).
Ulrich, Dave & Younger, Jon & Brockbank, Wayne & Ulrich, Mike. (2012). HR talent and the new HR competencies. Strategic HR Review.
Wanjugu, M. & Omagwa, J. (2017). Credit Risk Management and Financial Performance of Selected Commercial Banks in Kenya. Journal of Business and Management, 19(11), 6.
Wild, R. (2005). Concepts for operations management. Chichester: John Wiley & Sons.
Yarrow, Z. (2017). Effect of Training and Development on Employees' Performance: The Case of Equity Bank Kenya. (MBA), United States International University, Africa, Nairobi Kenya.
Yin, R. (2003). Case study research: Design and methods. Thousand Oaks, Calif.: Sage Publications.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Michael Nzuma Mutunga, Susan Njeri Wamitu
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
