An evaluation of planning strategies on Islamic Banks’ performance: Case of First Community Bank Limited Kenya

Abstract

The Kenyan Islamic banking is faced with challenges which include global financial crisis, declining interest margins affecting the sector particularly regarding the assets performance and new regulations, reduction in trade volumes and deposits mobilization. The main objective of this study was to investigate an evaluation of planning strategies on Islamic banks’ performance: case of First Community Bank Limited Kenya. The study was guided by four specific objectives that is; to identify strategic communication’s influence on the Islamic Banks’ performance case of First Community Bank Limited, to find out the organizational structure’s influence on the Islamic Banks’ performance case of First Community Bank Limited, to examine the resource allocation’s influence on the Islamic Banks’ performance case of First Community Bank Limited and to establish strategic leadership’s influence on the Islamic Banks’ performance case of First Community Bank Limited. The scope of this study was in Nairobi County, Kenya targeting on Islamic Banks, specifically, First Community Bank Limited. The study employed three theories that anchored this study. The theories include PLS theory, leadership contingency theory and structural contingency theory. This research utilized a descriptive survey methodology, which interprets relationships and compares study variables through the use of descriptions. Thre were 115 participants who were targeted; they included top, middle and lower management employees from this bank. A 30% sample size representation of the 115-member study population yielded a sample size of 62 participants. For the collection of data, a questionnaire was used.The collected data was encoded into a statistical program (version 24 of SPSS) in order to conduct the evaluation for this study. The findings of the study revealed that organizational structure had a significant and deleterious influence on performance. The findings of this research also indicated that resource allocation had a significant and deleterious influence on performance. The results of this research also demonstrated that strategic leadership had a significant and positive influence on performance. The study made a conclusion that to determine the effectiveness of the entire strategy planning resource allocation is a critical component of the procedure. The allocation of resources towards strategic planning has a substantial impact on the performance instance of FCB in Nairobi, Kenya, which is an Islamic bank. This study suggests that the management of FCB Kenyan Islamic banks should formulate approaches to acquire additional resources and maximize the utilization of existing resources in order to enhance the performance of the banks.

Key Words: Planning strategies, Islamic Banks’ performance, First Community Bank Limited Kenya

DOI: 10.7176/EJBM/16-9-03

Publication date: November 30th 2024