Factors Affecting the Choice and Adoption of Business Strategies in Financial Sector: A Survey of Banking Institutions in Eldoret Kenya

Abstract

Poor choice of strategies costs many organizations millions of dollars, On other hand, the good choice of strategy which is implemented and monitored badly is likely to born bad results at the end. For example a good choice of outsourcing strategy accompanied by lack of funds to support this program will be futile. This study sought to examine factors influencing adoption of business strategies in financial institutions using a survey of commercial banks in Eldoret Town Kenya. The objectives of this study was to  determine the relationship between corporate culture and strategic orientation, to assess the relationship between industry competition and strategic orientation, evaluate the relationship between resources and strategic orientation and to examine the relationship between organizational structure and strategic orientation in the Banking Institutions within Eldoret town.

The study was carried out on all banks in Eldoret and five management staff were selected randomly from five sections within each bank to participate in the study and this yielded 75 respondents. The collected data was coded and analysed using both quantitative and qualitative techniques with help of SPSS. Inferential statistics were used to test the significance of findings i.e. t-test and regression analysis.

The findings of this study revealed that there is significant relationship between corporate culture and business level strategic orientation within the banking sector and that organizational structure influence the choice and adoption of business level strategies in the banking institutions. It also showed a significant correlation between industry competition and strategic orientation and .finally, resources were found to be a major factor influencing the business level strategies in the banking institutions. The findings will benefit both banks and other financial institutions in identifying the factors suitable for business performance.

Keywords: SWOT Analysis, Strategic Planning, Strategy Meetings/Workshops, Benchmarking, Porter’s 5 Forces Model, Balance Scorecard, Value chain analysis, PESTEL analysis, Core Competencies, Scenario Planning, BCG Matrix, Outsourcing, Change Management Programs, Strategic alliances, Stakeholder mapping.