An Analysis of Strategy Implementation and their Effects on Performance by Investment Banks in Kenya

Abstract

The purpose of the study was to analyze the strategy implementation and their effects on performance by investment banks in Kenya. The study was guided by the following research questions; What is the effect of strategic leadership on performance of investment banks in Kenya? How does organizational culture affect performance of investment banks in Kenya? What is the effect of organizational structures on performance of investment banks in Kenya? The senior financial managers, investment managers, strategic managers, and business development managers were the subject of this study, which was centered on the 16 investment banks. The research design for the study was descriptive. The sample size consisted of 108 respondents. To gather data for the study, questionnaires were employed. Descriptive statistics, which made use of the mean, standard deviation, frequencies, and percentages, were used to analyze the data. The study then employed inferential statistics using basic regression and correlation analysis. To assess the validity and reliability of the study instrument, the researcher chose a pilot group of nine employees. The data were presented in tables for simpler comprehension. The study discovered a positive relationship between strategic leadership and investment bank performance (r=0.407, p=0.000). The regression model confirmed that improving strategic leadership further while keeping all other characteristics fixed will improve investment bank performance by 16.5%. The study established that aligning of operations has enhanced performance in most of the banking organization and individuals who understand their roles within the strategy contribute to performance of an organization. The employees who understand their responsibilities within the strategy contribute to performance of an organization. The study discovered a positive link between investment banks' performance and organizational structure (r=0.427, p=0.000). The regression model suggested that, while keeping all other parameters constant, improving organizational structure would increase investment banks' performance by 18.2%. The strategic goals and objectives laid by most of the banks have contributed in enhancing performance and mission of banks which has in turn contributed to improvement in performance. Undertaking of review of meetings to document adjustments made in strategy implementation process and tracking system to measure the success of the strategies helped enhance performance of organizations. Evaluation of the success of the strategies implemented and identification of the gaps in place enhanced the performance of organizations. The study discovered a positive link between investment banks' performance and organizational culture (r=3.17, p = 0.000). The regression model suggested that, while maintaining the other components constant, additional organizational culture enhancement would boost investment banks' performance by 10.1%. Banks have a culture that supports the strategies in place thus enhancing bank’s performance and most employees have a clear understanding of how the strategies are executed which has led to positive performance. The study came to the conclusion that there is a link between strategic leadership and investment bank performance. The leaders of various investment banks offered the necessary guidance, motivation and mentorship to junior staff. The study concluded that there existed a positive significant relationship between organizational structures and performance of investment banks. In order for investment banks to be capable of effectively implementing their strategy, their structures and processes need to be aligned with the overall strategic objectives. The study concluded that organizational culture and performance of investment banks were positively correlated. It was concluded that most of the investment banks have a culture that helped in translating strategic plans and initiatives into action thus enhancing performance of the organizations. The study recommends that investment banks should sponsor their staff to a continuing training and development program in order to expose the employees to specialized skills and knowledge. The study recommended that the managers of investment banks should adopt more decentralized forms of structures as means of improving the decision-making process. The leaders within the banking sector should always encourage growth and development of strong organizational culture while at the same time reinforcing core mission, vision and values of the organization. Include the statistics for both correlation and regression analysis for each and every objective.