CHANGE MANAGEMENT PRACTICES AND ORGANIZATIONAL PERFORMANCE: A SURVEY OF COMMERCIAL BANKS IN KENYA
Amos Tayari - Masters Student, Management University of Africa, Kenya
Bernadette Mutinda - Lecturer/Management Consultant, Management University of Africa, Kenya
ABSTRACT
Financial institutions are operating in a very dynamic marketplace today and this requires the ability to choose the right change opportunities while demonstrating the necessary degree of flexibility to meet the fluid requirements of the organization over time. This study assesses the relationship between change management practices and the organizational performance of commercial banks in Kenya. Specifically, the study sought to assess the effect of innovation, change of culture, change leadership and change in organization structure on the organizational performance of commercial banks in Kenya. The study was founded on planned change theory as the underpinning theory, Schumpeter’s theory of innovation, elegant model, trait theory and the goal setting theory, which anchor the study variables. The study adopted a descriptive research design and employed stratified sampling to arrive at a representative sample size of 378. Data was collected using a semi structured questionnaire which was pilot tested to check for validity and reliability. Descriptive statistics was analyzed using measures of central tendencies and qualitative data was analyzed using content analysis. Inferential statistical analysis was done using multiple regressions using SPSS Version 22 software. Analyzed data was presented in form of tables to facilitate comparison. The study might be useful to various stakeholders in the banking industry by offering insight on how to manage change in terms of new ideas and response to environmental turbulence. The study findings established that there is a significant positive influence between the determinants notably innovation, change of culture, change leadership, and change in organization structure and organizational performance of commercial banks in Kenya. The findings of this study were that aspects of change management affect performance of commercial banks in Kenya with the majority being those in agreement. This was indicated by innovation having 95% of the respondents, change of culture aspect with 95%, change leadership with 98%, and change in organization structure with 96%. The study recommends a winning combination of integrating either vocational or entrepreneurship trainings with savings groups within financial inclusion programmes since the majority of women plan to use their savings to start a business or economic activity. The study recommends that management of commercial banks should increase investment in innovation to influence organization performance of their institutions positively. The study recommends that it is very useful to for management of commercial banks to understand organizational culture, which contributes to improved performance. The study recommends that the commercial banks should have a very effective and highly competent leadership. Lastly, the study recommends that commercial banks should adopt management systems and administrative procedures that assign responsibilities for allocation of duties for the various functions.
