Organizational culture and strategy implementation by commercial banks in nyeri county, Kenya.

ABSTRACT

World over, the operating environment for commercial banks has changed randomly occasioned by regulation and intense competition. This has led to exploration of many strategies in the commercial banks in a bid not only to survive but win competitive advantage. Implementation of these strategies has not always been successful and it has been observed that poor implementation of strategies may have cost the banks dearly in developing economies. The poor implementation status has been blamed on unconducive organisational culture in some firms. In Kenya, a the wave of banking sector failure has not spared its players with Chase Bank, Dubai Bank of Kenya and Imperial Bank forced to close doors recently. The study sought to determine the effect of organisational culture on strategy implementation by Commercial Banks in Nyeri County, Kenya. The study assessed four types of organisational cultures namely; task culture, role culture, person culture and power culture and analysed the effect of each of these cultures on strategy implementation. The Earned Value Method that considers cost, schedule and scope of strategies implementation was used in indicating the status of strategy implementation. The study was anchored upon the cultural dimensions theory and the institutional theories. A descriptive survey research design was employed in undertaking the study. A target population of 84 respondents drawn from all the 12 commercial banks in Nyeri County was relied upon. The census study approach was subject all the 12 commercial banks operating within the county to the study. Purposive sampling was also employed to select the top management team of the banks as the choice respondents. The respondents included the Branch Managers, Operations Managers, Accountants, Credit Managers, Marketing Managers, Customer Relations Managers and ICT Managers of all the Commercial Banks. The study used a questionnaire for data collection which was assessed for validity using expert opinion. Reliability of the instrument was assessed using the Cronbach’s Alpha Reliability Test. Data was analysed using both descriptive and inferential statistics. Content analysis was used for qualitative data. The One Way Analysis of Variance (ANOVA) and the multiple regression analysis results established that organisational culture was a statistically significant predictor of strategy implementation. Person and task cultures portrayed positive effects on strategy implementation while role and support cultures demonstrated negative effects. The Pearson correlation analysis further affirmed this association indicating negative relationships between role culture and support culture with strategy implementation. The Pearson Correlation analysis further affirmed that power and task cultures demonstrate a positive associations with strategy implementation. The study recommends that the organisation establishes appropriate organisational culture that would cultivate an environment that support successful strides in strategy implementation. Specifically, the organisation should strike a balance between the need to assert authority on employees with the need to make employees feel recognised and appreciated. The banks should also work to reduce unnecessary bureaucracies as results show detrimental effects on strategy implementation. Lastly, organisations should discourage perpetration of person culture which is seen to nurture individualism and ultimately diverts attention from the wider organisational goals.