WANGIRA FLERIA ( PhD STUDENT) DETERMINANTS OF SUCCESSFUL IMPLEMENTATION OF STRATEGIC CHANGE INITIATIVE IN THE BANKING INDUSTRY IN KENYA BY: WANGIRA FLERIA ( PhD STUDENT) Presented at the 4th DBA-AMR JOURNAL International Conference on 24th October 2018, at the School of Business, University of Nairobi, Kenya

INTRODUCTION The banking sector acts as the life blood of modern trade and commerce to provide them with major source of finance. Over the last 2 decades the banking sector has undergone substantial changes that has necessitated the banks to implement strategic changes so as to remain competitive. All the changes are geared towards increasing customer satisfaction and sustainable competitive advantage.

Knowledge Gap Different studies carried in the banking industry have attributed successful change management practice to performance without being able to isolate specific factors that determined this success. Furthermore, most of these studies were carried out in other parts ( context) and thus the results may not be generalized to Kenya. A study of Nigerian Banks by Adegbaju and Olokoyo (2008) sought to gain a better understanding of the theoretical and empirical relationship between strategic human capital development initiatives.

Knowledge Gap…cont. The only studies available on change management in Kenya are those of Nafula (2005), Musyoka (2008) and Osano (2009). Musyoka (2008) was based on establishing the practice of Human Capital Management at the National Social Security Fund (NSSF). The study by Nafula (2005) focused on sugar companies in Kenya while that of (Osano, 2009) purposed to show means and practical steps for managing change effectively in financial services. As such, this constitutes a gap that this study seeks to bridge.

LITERATURE REVIEW The individual perspective school. According to Lewin (1947), Change Management Theory is informed by three (3) perspectives or schools of thought namely: The individual perspective school. The Group Dynamics school. The Open System school

The Individual Perspective School Behaviour is the result of an individual’s interaction with the environment - All behaviour is learned - To bring about change, one manipulates the environment in which the individual is operating in (e.g. Pavlov and operant conditioning) -To bring about change, the focus is on the individual

The Group Dynamics School Organizational change comes about through groups and teams rather than individuals - People in organizations work in groups - Individual behaviour is moderated by prevailing group practices and norms The focus of change should be on influencing group norms, roles and values

The Open Systems School Organizational change comes about by moving the whole organization - The organization is made up of interrelated and interconnected subsystems - Change in one subsystem will impact on the whole organization The focus of change should be an transforming the whole organization

LITERATURE REVIEW…cont. The study will be guided by two theories namely: Environment dependence Theory ( Ansoff 1965)- Organizations are environment dependent and environment serving. Adaptation to the external forces is essential for survival and success.

Cont… Literature Review b). Kanter Theory of management change ( 1992) – The theory advocates for ten( 10) systematic steps that should be embraced by an organization when managing change. -The theory appreciates the fact that the change process is complex and difficult but it is inevitable. - The theory is also postulated on the appreciation that people resist change and hence all stakeholders must buy into the necessity for change to make it a success.

Determinants of successful implementation of strategic Change According to Fraj, Matute and Melero (2015), there are four determinants that are key in the implementation of strategic change. Other scholars like Sirkin et al (2005) indicated the same number of factors but which are different from those advanced by Fraj et al ( 2015), which are performance integrity, capacity of project team, commitment of staff & management and handling resistance towards the desired change. The determinants to be considered in the study are those advanced by Fraj et al which are more comprehensive and encompass the ones discussed by Sirkin. These are:

Determinants …cont. Management commitment to change. Organizational Capability Organizational Culture and Values Organizational strategy.

A. Management Commitment to Change. Strategic leadership ( Kotter, Hambrick & Mason, Hambrick & Finkelstein, 1996)- is the ability to anticipate ,envision, maintain flexibility and empower others to achieved results. According to the upper Echelon Theory, having top management team with superior management skills is critical in the management of change. The level of management’s discretion is also key.

B. Organizational Capability Dynamic capabilities approach ( Teece et al, 1997) – indicates that every firm should exploit existing internal and external capabilities for competitive advantage. The Resource Based View ( RBV) Theory ( Penrose 1959, Rumelt 1984, Teece 1984 and Wernefelt 1984) –emphasizes the improtance of exploiting the resources to gain core competencies and competitive capabilities that should be valuable, rare and difficult for the competitors to imitate.

C. Organizational Culture & Values Every organization has a culture & Values that guide them. Firms are required to match their culture to strategy as this contributes to the successful performance and implementation of strategic change. A number of scholars have advanced the importance of embracing learning as a culture. Argyris (1978)- ‘Organizational success depends on learning’ Senge (1990) of the fifth discipline- popularized the term ‘learning organizations”. Nonaka (1991) developed the knowledge- based theory

D. Organizational Strategy A firm should have a flexible strategy that can adapt and be aligned to changes that occur in the environment. It is therefore important to evaluate the effectiveness of the strategy in place and its suitability in adapting to the turbulent environment.

METHODOLODY The study will adopt a descriptive cross sectional survey design. The population of study will be all the 42 commercial banks based in Nairobi County. Data will be collected using semi structured questionnaire which will be administered to the heads of strategy in respective commercial banks. The data collected will be analysed using descriptive statistics (measures of central tendency and measures of variations)

Importance of the Study The findings of this study will be of great importance to the following people: Bank managers -by giving them more insight on the factors affecting successful implementation of strategic change. As such, the recommendations derived from the findings are hoped to give them a guideline of how they can effectively ensure that change management is achieved in the bank for improved performance.

Importance of the Study…cont. Policy makers- are also expected to gain more information on the various issues which affect successful implementation of strategic change. Thus, when formulating policies towards effective change management, they may be able to incorporate all those factors within the policies.  

Importance of the Study…cont. Academicians -will benefit from this study because the findings will add to the existing body of knowledge. The study will also give recommendations on areas of further research.

CONCLUSION Where are there are other studies that have been carried out in regards to effectiveness of change management, none of them has been specific to the Banking Industry in Kenya and therefore there is need for this study to be carried out.

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