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Turnaround Strategies and Performance of Commercial Banks in Kenya
This study sought to analyze the turnaround strategies and performance of Commercial Banks in Kenya. The specific objectives were to establish the influence of diversification strategy, restructuring strategy, modernization strategy and retrenchment strategy on the performance of commercial banks in Kenya. The theoretical foundation of this study was Resource-based theory, Generic strategic theory, Dynamic capabilities theory and Structural adaptation to regain fit theory. Descriptive cross – sectional survey research design was employed. Targeted population was84 employees at the management level in nine commercial banks that implemented turnaround strategies. The study applied the use of Fisher, Laing and Stoeckel formula in determining the sample size of 69 respondents. The study used Stratified random sampling to select the sample to be used. Questionnaires were administered for primary data collection. SPSS version 23 was used to analyze quantitative data using descriptive and inferential statistics. The findings of the study were presented descriptively using frequencies, percentages and means, while inferentially the study used correlation and regression analyses to test the relationship between turnaround strategies and performance of commercial banks in Kenya. The study found that diversification strategy positively and significantly relates with organizational performance; restructuring strategy positively and significantly relates with organizational performance; modernization strategy positively and significantly relates with organizational performance; and retrenchment strategy positively and significantly relate with organizational performance. The study recommends the government and policy makers to make sure that application by banks for diversification is made easy. Commercial bank managers and other high-level stakeholders should apply the range of diversification strategies to expand the scope of markets and operations of their entities in a bid to ensure sustainable competitive advantage. Management of commercial banks to make sure that all the respective heads of departments has full and clear information on time to enhance easy decision making on organizational restructuring to enhance performance. Commercial banks should embrace modern technology, since technology is an important asset in improving business and transforming market functions in modern society.
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