INFLUENCE OF STRATEGIC CONTROLS ON PERFORMANCE OF COMMERCIAL BANKS IN NAIROBI COUNTY, KENYA
INFLUENCE OF STRATEGIC CONTROLS ON PERFORMANCE OF COMMERCIAL BANKS IN NAIROBI COUNTY, KENYA
Ndiwa Jemimah Murunga - Masters Student, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Jared Deya - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The study sought to establish the influence of strategic controls on performance of commercial banks in Nairobi County, Kenya. The specific objectives of the study were to assess the influence of premise controls on performance of banks in Nairobi County; to determine the influence of strategic surveillance controls on performance of banks in Nairobi County; to evaluate the influence of special alerts controls on performance of banks in Nairobi County; and to establish the influence of implementation controls on performance of banks in Nairobi County. The target population composed of the 1226 management staffs employed at the 42 commercial banks in Nairobi County, Kenya. A sample of 10% was selected from within each group in proportions. Stratified random sampling technique was used. This generated a sample of 123 respondents. The study used of a semi-structured questionnaire administered individually to all respondents. The study selected a pilot group of 12 individuals from the target population at Commercial Banks in Kiambu County to test the construct validity as well as internal consistency using Cronbach's alpha, where an alpha value of above 0.7 was considered acceptable. Data analysis involved coding, editing and cleaning of data for processing using Statistical Package for Social Sciences (SPSS). Descriptive statistics such as mean, frequencies, standard deviation, and percentages were used to profile major patterns emerging from the data. Quantitative data was presented in tables and figures. Multiple linear regression analysis was used to indicate the direction, strength and significance of the relationships. The study found that the banks have adopted premise controls to a very great extent. In addition, the commercial banks in Nairobi County have adopted strategic surveillance controls and special alert controls in their operations to great extents while they adopted implementation controls to a moderate extent. The t-value of premise controls variable was 1.99, strategic surveillance controls variable had a t-value of 1.92, special alerts controls variable had a t-value of 1.96, and implementation controls variable had a t-value of 1.96. Since higher t-value imply greater confidence in regression coefficients, the t-value of premise controls variable imply that premise controls is reliably the most predictor variable. Based on the output obtained Unstandardized beta coefficient of premise controls variable was 0.684, strategic surveillance controls variable had 0.860, special alerts controls variable had 0.715, and implementation controls variable had 0.739. The study concludes that organizational aspects, industrial elements and environmental factors influence the performance of the banks. Competitor surveillance, industrial trends monitoring and strategic environmental scanning influence the performance of commercial banks. The banks have a crisis management tool designed to identify vulnerable areas, develop alternative plans, and practice reactions to the crisis; special alert controls keep the banks ready for a time of crisis. There is need to formulate dynamic policy plans to counter the dynamic environment experienced by the commercial banks. Strategic surveillance controls should be designed in such a manner that enables the banking organisations to uncover important and unanticipated information from multiple information sources. The management of the commercial banks should develop implementation controls to become strategically positioned and oriented in market through strong organizational cultures.
